Preamble

The House met at Half past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

BRADFORD CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL

WALSALL CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL

Read a Second time, and committed.

CLYDE NAVIGATION ORDER CONFIRMATION BILL

"to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1936, relating to Clyde Navigation," presented by Mr. J. Stuart; and ordered (under Section 7 of the Act) to be considered Tomorrow, and to be printed. [Bill 92.]

PETITION (CENTRAL AFRICAN FEDERATION)

Mr. Dugdale: I beg leave to present a humble Petition made by Thomas Stanley Lane Fox-Pitt, Commander, Royal Navy (retired), an officer of the Most Excellent Order of the British Empire, and Hastings K. Banda, licentiate of the Royal College of Surgeons, Edinburgh.
The Petitioners ask that in view of the fact that certain responsible Chiefs of Northern Rhodesia and Nyasaland have presented a Petition to the United Nations, and for the reasons set out in this Petition and
In order not to prejudice the Petition of the Chiefs and People as aforesaid at the United Nations nor to embarrass the United Nations in regard to the consideration of the said matter, this honourable House will take no steps that might in any way so act either to the detriment of the Chiefs and People as aforesaid nor to the embarrassment of the United Nations.
And your Petitioners, as in duty bound, will ever pray.
To lie upon the Table.

Oral Answers to Questions — CIVIL AVIATION

Gatwick Airport (Development)

Mr. Beswick: asked the Minister of Civil Aviation when he expects to be able to start work on the development of Gatwick Airport as the alternative airport for London.

The Minister of Civil Aviation (Mr. Alan Lennox-Boyd): Since I announced in the House last July the decision to develop Gatwick as the southern alternate for London Airport, certain points which arose out of subsequent discussions with local authorities have been under consideration, together with certain technical problems connected with the lay-out of the aerodrome. Until these are resolved I have nothing to add to the statements previously made.

Mr. Beswick: Does the Minister appreciate that there is a certain amount of misunderstanding as to exactly what is the position now? Do I gather from what he has just said that the decision announced in July last year is not a fast and firm decision and that the whole question is still being reconsidered?

Mr. Lennox-Boyd: The present Government suffer from some difficulties not altogether of their own making, and one of my problems in this matter is the assurance given by the late Socialist Administration that they did not propose to develop Gatwick as a major airport. I think that after having given that assurance, as in many other fields, they speedily regretted it. But it has created a problem for me and I have nothing to add to the answer that I have given.

Mr. Beswick: Was the Minister not aware of all undertakings given by his predecessors when he made his statement last July?

Mr. Lennox-Boyd: I am certainly aware of all that has passed Ministerially, both under this Government of which I am a member and under our predecessors, but inferences have been drawn from statements made by my predecessors, of which naturally we must take account.

Mr. Gough: Is my right hon. Friend aware that the obvious care which he has taken over this involved problem has given great satisfaction and is appreciated by the local authorities?

London Airport (Fog Dispersal)

Mr. Beswick: asked the Minister of Civil Aviation whether he has now come to a decision about the use of F.I.D.O. at London Airport.

Mr. Lennox-Boyd: The technical problems associated with a high pressure F.I.D.O. installation have in the main been solved, but it has not yet been decided whether a large scale experiment is justified, and if so whether such experiment should take place at London Airport. In the latter case, it will also be necessary to reach satisfactory financial arrangements with the users before it is possible to proceed to the installation of a full scale F.I.D.O.

Mr. Beswick: Does the Minister remember that I said pretty well the same thing two years ago? Can he say whether any progress at all has been made within the last two years and when he expects a decision to be made in this matter?

Mr. Lennox-Boyd: The most important progress of all is that engineering problems associated with the design of burners, lighters and systems of control have, through the work of the Royal Aeronautical Establishment at Farnborough, now been virtually solved.

Mr. Beswick: I was glad to acknowledge that work two years ago. That work had already been done and I was glad to acknowledge it. Does the Minister not appreciate that the question now remaining is whether he is going to take a decision, taking into account the views of the commercial operators? Can he say when a decision is likely to be made?

Mr. Lennox-Boyd: I am fully conscious of the importance of a decision being made, but, as the hon. Gentleman knows, not only civil but military aviation is involved as well as questions of public finance. I can assure him that this is being energetically pursued.

Independent Operators

Mr. Ernest Davies: asked the Minister of Civil Aviation if he will publish in the OFFICIAL REPORT a list of applications by independent operators to run air

services in 1953 or, subsequently, which he has approved on the recommendation of the Air Advisory Council.

Mr. Lennox-Boyd: A list of applications from independent companies so far approved was placed in the Library of the House on 20th May. I have had this brought up to date and a revised list showing the position as at 1st June was sent to the Library this morning. It will be brought up to date from time to time.

Mr. Davies: May I express appreciation of the fact that at long last, and rather belatedly, the Minister has recognised Parliament's right to have this information?

Mr. Lennox-Boyd: It certainly is not at long last. I have sent in a new amended list today. The list was originally put in on 20th May. If I put it in the OFFICIAL REPORT it would occupy between 12 and 15 pages, and it is really better to put it in the Library.

Aircraft Maintenance Engineers

Lieut.-Colonel Hyde: asked the Minister of Civil Aviation how far the estimates in Appendix E of the Wilcock Report, 1949, Command Paper No. 7746, on the recruitment, training and licensing of personnel for civil aviation have been borne out by subsequent events, and in particular how many aircraft maintenance engineers are employed in an operative or hourly rated capacity; how many of these have served an indentured apprenticeship in the aircraft engineering industry; and how many have served an indentured apprenticeship in any associated industry.

Mr. Lennox-Boyd: In general, the estimates in Appendix E of the Wilcock Report proved to be considerably in excess of the numbers actually employed. I am informed that there are about 3,600 licensed aircraft maintenance engineers of whom about 90 per cent. are employed in an operative or hourly rated capacity; 730 have served apprenticeships in the aircraft engineering industry and 535 in associated industries.

Lieut-Colonel Hyde: Is my right hon. Friend aware that British European Airways have recently dismissed an engineer on the grounds that he had no indentures of apprenticeship, despite the fact that he holds a current licence issued by the


Ministry which enables him to certify 75 per cent. of all the aircraft registered in the United Kingdom, and despite the possession by him of 14 years' practical aircraft engineering experience? What does my right hon. Friend propose to do about it?

Mr. Lennox-Boyd: I will follow up that individual case with the employers in the Corporation concerned.

Helicopter Airstop, London

Lieut.-Colonel Lipton: asked the Minister of Civil Aviation whether he will now announce the result of his discussions with the London County Council regarding the site of a landing station for helicopters in Central London.

Mr. Lennox-Boyd: Discussions with the London County Council have covered the earmarking of a site on the South Bank for occasional landings in existing helicopters, and suggestions for a larger airstop capable of coping with the intermediate 13-seater Bristol 173 when it can come into regular service.
In the meanwhile, and until more is known of the characteristics of the intermediate type, I do not propose to commence work on an airstop in Central London and I am confident that we shall be able to finalise requirements and to develop an airstop before the intermediate type is in commercial service.
The long-term requirements for a permanent airstop to accommodate the largest helicopters will, of course, depend on the experience gained in handling the intermediate types.

Lieut-Colonel Lipton: Does the answer not mean that for a long time to come the Minister is going to do nothing about anything, and that London is not to have a helicopter airstop capable of dealing with modern helicopters? Is it not quite clear that either the South Bank or the roof of Waterloo Station are likely to be the most suitable sites for this purpose?

Mr. Lennox-Boyd: It may well be that somewhere on the South Bank, not necessarily on the existing site but somewhere on the South Bank, or on the roof of Waterloo Station may well turn out to be the final place, but it would be unwise to act in advance of knowledge on which alone a decision can properly be based.

SUEZ CANAL BASE

Mr. T. Reid: asked the Secretary of State for Foreign Affairs how much Egypt has agreed to pay for the construction or maintenance of the Suez Canal base; and how much she has paid.

The Minister of State (Mr. Selwyn Lloyd): The Egyptian Government agreed in the 1936 Treaty to construct barrack and technical accommodation in the Canal Zone for the British forces, a quarter of the cost to be paid by His Majesty's Government. Construction had not started by the outbreak of war and was subsequently carried out entirely by His Majesty's Government. In the event, no accommodation or public utilities have been provided at the expense of the Egyptian Government.

ALBANIA (BRITISH CLAIM)

Mr. Ernest Davies: asked the Secretary of State for Foreign Affairs if the gold looted by the Germans and found by the Arbitrator to be the property of the National Bank of Albania, has yet been handed over to the United Kingdom in partial settlement of the compensation awarded to Her Majesty's Government in connection with the Corfu Channel incident.

Mr. Selwyn Lloyd: No, Sir. As I told the hon. Gentleman on 15th April, the Arbitrator's award was pronounced on 20th February. While no communication has been received from the Albanian Government, the Italian Government have appealed to the International Court of Justice against the Arbitrator's decision.

Mr. Davies: Would the Minister confirm that the position now is that this gold was awarded to Albania by the Arbitrator, that it was going to be set off against our claim for compensation arising from the Corfu Channel case, that an appeal has now taken place to the International Court and that if the gold remains with Albania it will come to us in compensation?

Mr. Lloyd: My understanding of the situation is the same as the hon. Gentleman's.

ANGLO-SOVIET TREATY, 1942

Mr. A. Henderson: asked the Secretary of State for Foreign Affairs what consultations have taken place between the Soviet Government and the United Kingdom Government with a view to superseding Article IV of the Anglo-Soviet Treaty of Collaboration and Mutual Assistance of 1942 as a result of the adoption of proposals contemplated in Article III (1) of the treaty.

Mr. Selwyn Lloyd: There have been no recent consultations on this subject.

Mr. Henderson: In view of the statement recently published in "Pravda," I think on 24th May, which states that the Prime Minister had completely overlooked the existence of this Treaty in his recent international review, would the Minister say whether, in the view of Her Majesty's Government, Part II of this Treaty providing for collaboration and mutual assistance between the two countries still remains fully effective and that Her Majesty's Government attached great importance to the continuation of this Treaty?

Mr. Lloyd: It is quite true that this Treaty is still in force and, therefore, Part II of it is in force. The right hon. and learned Gentleman will remember that Article IV in Part II does deal with the question of mutual guarantees. Article III states quite clearly that it was envisaged as going to be within the framework of an organisation such as the United Nations.

Mr. Henderson: Will the right hon. and learned Gentleman answer the last part of my supplementary? Do the Government still attach great importance to this Treaty?

Mr. Lloyd: I think any treaty is of importance, but this Treaty was intended to operate within the framework of the United Nations. I think that is the more important factor.

B.B.C. OVERSEAS SERVICES (JAMMING)

Mr. Ernest Davies: asked the Secretary of State for Foreign Affairs what recent representations have been made to the Union of Soviet Socialist

Republics in regard to the jamming of the British Broadcasting Corporation's overseas services; and with what result.

Mr. Selwyn Lloyd: No such representations have been made.

Mr. Davies: Does not the Minister think that, in view of the somewhat changed atmosphere, it would be advisable to make approaches to the Russian Government asking them whether they could change the policy with regard to the jamming of our broadcasts?

Mr. Lloyd: The time to have made such representations was really when the jamming started in 1949. No representations were made then. I think the Soviet Government are very well aware that they are acting in breach of the Atlantic City Convention of 1947. They know that Her Majesty's Government strongly disapprove of their action. I really do not think that any useful service could be done by making formal representations.

Mr. Gordon Walker: Is there any evidence of an increase or decrease in the jamming, or does the right hon. and learned Gentleman need notice of such a question?

Mr. Lloyd: I would require notice of that question in order that I may refer to the times which the right hon. Gentleman has in mind.

BRITISH CHAPEL, SEVILLE (DAMAGE)

Sir D. Savory: asked the Secretary of State for Foreign Affairs whether he has now obtained compensation from the Spanish Government for the damage done on 4th March, 1952, to the Protestant Church in Seville, which is British property.

Mr. Selwyn Lloyd: No, Sir. Her Majesty's Ambassador at Madrid presented a claim for compensation on 10th May, 1952. The Spanish Government have, however, pointed out that before they can admit that Her Majesty's Government have any right to demand compensation, the owners of the chapel must first have recourse to the legal remedies open to them in the Spanish courts. So far as I am aware, they have not yet done this.

Sir D. Savory: Does not compensation imply also redress for the outrage committed to an ordained clergyman in our Church by setting fire to him in his vestments, by piling up the prayer books and hymn books on the Holy Table—an act of sacrilege—and setting fire to them? All these facts have been admitted by my right hon. Friend the Foreign Secretary.

Mr. Lloyd: The people alleged to be responsible for these outrages are now in the process of coming before the Spanish courts. I think the court of first instance have found that there is a criminal case, and the case will go for trial.

PROTESTANT MISSIONARY, UBATE (ATTACK)

Sir D. Savory: asked the Secretary of State for Foreign Affairs whether he has now received from the Colombian Government redress and compensation for the attack on the Reverend Samuel Heap, a missionary from Barnsley, Yorkshire, who was severely injured when the Protestant congregation at Ubate was attacked on Sunday, 12th April.

Mr. Selwyn Lloyd: No, Sir. As I informed the hon. Member for Gravesend (Sir R. Acland) on 20th May, the investigation ordered by the Colombian Government is being pursued, but it was to be expected that it would be some little time before it was completed. The Colombian Government have meanwhile been made aware of our continued interest in this case, and have stated that the provincial authorities concerned have been reminded of its urgency.

Sir D. Savory: Has my right hon. and learned Friend reminded the Colombian Government of the intense indignation felt by all the 12 Protestant societies in this country—all represented on the United Protestant Council—against the outrage on this humble preacher of the Gospel who was attacked and escaped narrowly with his life after the doors of his chapel had been broken down by stoning? Surely something should be done to make it apparent to the Colombian Government how strongly we feel on this question?

Mr. Lloyd: Our views on this matter have been conveyed to the Colombian Government. We are pursuing the matter actively. On 8th June we received a

communication reporting the latest representations which Her Majesty's Ambassador had made.

CUBAN RAIL ASSETS (BRITISH CLAIMS)

Sir H. Linstead: asked the Secretary of State for Foreign Affairs whether he will now reopen with the Cuban Government discussions on the claims of British shareholders in the United Railways of Havana.

Mr. Selwyn Lloyd: My right hon. Friend understands that negotiations are in progress in Havana for the sale of the Cuban assets of the Company to a private individual, and there appears to be no call for his intervention at the present time.

RELIGIOUS PERSECUTION (REPRESENTATIONS)

Mr. de Freitas: asked the Secretary of State for Foreign Affairs on what occasions during the last two years representations have been made to foreign governments against the religious persecution of Christians of the Protestant or Roman Catholic faith.

Mr. Selwyn Lloyd: I will, with permission, circulate the detailed answer in the OFFICIAL REPORT.

Following is the answer:
List of Representations made since March, 1952, to foreign Governments where specific British interests of a religious nature were involved:

(i) On 29th March, 1951, H.M. Ambassador at Madrid made representations about the continued closure of five British-owned Evangelical chapels in Spain.
(ii) On 29th March, 1951, H.M. Ambassador at Madrid asked for the relaxation of the ban on the importation into Spain of Bibles and devotional works by the British and Foreign Bible Society. These were required for worshippers at British-owned chapels in Spain.
(iii) On 26th May, 1951, H.M. Ambassador at Madrid protested against the ill-treatment by the local Spanish authorities of Mrs. Stuart Brown, the wife of a British missionary at Cozar, Spain.
(iv) H.M. Ambassador at Madrid made representations on 16th February, 1952, about the refusal of the Spanish police to allow celebration of worship at a Canadian-owned chapel in Madrid.


(v) H.M. Ambassador at Bogota made
representations to the Colombian Government about assaults on a Canadian missionary, the Rev. Ralph Hines, on 15th February, and 29th April. 1952.
(vi) On 25th February, 1952, H.M. Ambassador at Madrid repeated his representations about the continued closure of British-owned chapels in Spain and the ban on the importation of Bibles (see (i) and (ii) above).
(vii) On 18th March, and 10th May, 1952, H.M. Ambassador at Madrid protested against an attack on a British-owned chapel at Seville and claimed compensation.
(viii) On 12th April, 1953, H.M. Ambassador at Bogota protested about an assault on the Rev. Samuel Heap, a British missionary.
(ix) In China, H.M. Minister at Peking has made numerous protests on the imprisonment, detention and sufferings of Christian missionaries in that country. In September, 1951, in April, September and December, 1952, and in April. 1953, he made general representations about all United Kingdom, Canadian and United Nations nationals, the majority of whom are missionaries, imprisoned or detained in China.
(x) H.M. Minister at Peking has also made individual representations in the following cases:

U.K. Citizens

(a) Rev. G. Bull—nine times.

(b) Sister Dominic Marie Turner—three times.

Canadian citizens

(c) Sister Raymone-Marie—once.

(d) Sister Veronique—once.

(e) Sister Marie-Germaine—once.

(f) Sister Alphonse du Redempteur—once.

(g) Sister Paule-Alix—once.

(h) Ten sisters of the Mission of Our Lady of the Angels at Kueiyang—once.

(i) Five nuns of the Catholic Orphanage at Canton—once.

United States citizens

(j) Bishop G. O'Gara—once.

(k) Bishop Francis Ford (deceased)—once.

(l) Bishop Carlton Lacey (deceased)—once.

(m) Father Does—once.

(n) Father Westhoven—once.

(o) Father Leonard—once.

NAZI VICTIMS (COMPENSATION)

Mr. Hector Hughes: asked the Secretary of State for Foreign Affairs if he is aware that the Cabinet of the German Government in Bonn have approved a Bill to give compensation to victims in Germany of Nazi persecution; that it is desirable that this Bill should extend its benefits so as to include non-German displaced persons left in Germany; that this matter is urgent as

the Bill is now on its way to the German statute book; and if he will state what representations or other steps Her Majesty's Government are making to the German Government in Bonn to extend the scope of the Bill in this manner.

Mr. Selwyn Lloyd: I am aware of this draft law. The hon. and learned Member will understand, however, that responsibility for protecting the legal rights of displaced persons in Germany is discharged by the United Nations High Commissioner for Refugees. He states in his Annual Report, received last week, that he has been in continuous consultation with the Federal German Government on all aspects of the draft law. No representations have been received by the Allied High Commission from the United Nations High Commissioner on the subject.

Mr. Hughes: Does not the Minister of State agree that the regard for human rights which rightly actuates the United Nations is outraged by discrimination against victims of Nazi oppression? Surely something should be done to see that the particular victims I have mentioned in a letter to the Minister are included in this Bill?

Mr. Lloyd: I quite agree that there should not be discrimination. I think the United Nations High Commissioner for Refugees is very well aware of this matter and is seeking to do his best in regard to it. I propose to ascertain if that is the case.

Mr. Noel-Baker: In view of the wide interest in this matter could the Minister of State make the High Commissioner's Report available in the Vote Office?

Mr. Lloyd: May I consider the right hon. Gentleman's suggestion?

KOREA (TRUCE TALKS)

Mr. Hale: asked the Secretary of State for Foreign Affairs whether he is prepared to make a considered statement on the action which is to be taken by the United Nations Organisation to counter the effects of the recent declarations of Mr. Syngman Rhee and other members of the Government of South Korea that they are not prepared to terminate hostilities in


Korea in pursuance of an armistice negotiated by the United Nations Organisation.

Mr. Selwyn Lloyd: As was made clear by the Prime Minister's statement yesterday, the agreements reached between the two sides at Panmunjon now provide the basis for the conclusion of an armistice on terms compatible with the honour of the Allied Powers acting under the authority of the United Nations, and in the best interests of the people of Korea.
As to the recent declarations by President Syngman Rhee and his Government, I have nothing to add to the Prime Minister's supplementary reply to the right hon. and learned Member for Rowley Regis and Tipton (Mr. A. Henderson) yesterday.

POTATOES

Captain Duncan: asked the Minister of Food the tonnage of potatoes used for human consumption in each of the last five years; and what his estimate is for 1953.

The Parliamentary Secretary to the Ministry of Food (Dr. Charles Hill): As the reply includes a number of figures, I will, with permision, circulate it in the OFFICIAL REPORT.

Following is the information:


Crop Year



Estimated tonnage of potatoes used for human consumption in the United Kingdom '000 tons


1947–48
…
…
…
5,249


1948–49
…
…
…
5,697


1949–50
…
…
…
5,699


1950–51
…
…
…
5,591


1951–52
…
…
…
5,185


1952–53
…
…
…
5,275

Captain Duncan: In view of the apparent fact that there is a large surplus of potatoes in Angus at the present moment, can my hon. Friend say whether in fact there is a surplus in the country as a whole and, if there is, what steps is he taking to relate supply to demand?

Dr. Hill: There has been a particularly good crop in Scotland in the current season, but it has been almost entirely cleared from the farms. On 1st March there were 525,000 tons on the farms, but the position today is that there are less than 30,000 tons.

Mr. Manuel: In view of the Parliamentary Secretary's reply in connection with Scotland, can he indicate whether a greater acreage was planted for this year's spring crop than for last?

Dr. Hill: If the hon. Gentleman will put down that question I shall be glad to answer it.

Oral Answers to Questions — MINISTRY OF DEFENCE

Atomic Warfare Training, Germany

Mr. de Freitas: asked the Parliamentary Secretary to the Ministry of Defence what training in atomic warfare British officers will receive from American officers in the United States Zone of Germany.

The Parliamentary Secretary to the Ministry of Defence (Mr. Nigel Birch): A series of courses in the tactical use of atomic weapons is being conducted by the United States authorities for N.A.T.O. commanders and staff officers.

Mr. de Freitas: Is the Parliamentary Secretary sure that these courses are not largely a waste of time, since the American officers are prevented by their law from passing on to their allies a great deal of the atomic warfare information?

Mr. Birch: There are restrictions imposed by the United States Atomic Energy Act, but I am advised that these courses are proving of great value.

Officers' Pensions

Mr. Marlowe: asked the Parliamentary Secretary to the Ministry of Defence what steps were taken by the Service Departments prior to the stabilisation of officers' pensions in 1935 to secure the agreement of the officers concerned; and, having regard to the fact that these were previously adjustable to the cost of living, in what form the agreement of any individual was secured whereby he consented to the abolition of the sliding scale and the substitution of a fixed pension at 9½ per cent. below the rate agreed upon in 1919.

Mr. Birch: The answer to the first part of the Question is "None, Sir." The second part does not therefore arise.

Mr. Marlowe: Is it not the case that in 1920 these officers were given the option to adopt a pension rate which was adjusted to the cost of living? Does not my hon. Friend's answer mean that in 1935 it was abrogated unilaterally without their consent? If they had that rate today would not they enjoy much greater pensions than they do now?

Mr. Birch: I do not think it is strictly true to say that an option was given in 1919. A new code was brought in in 1919 which was much better than the existing code.

Mr. Shinwell: If, as the hon. Gentleman admits, the new code was imposed without the consent of those concerned, does not that strengthen the case for reconsideration of this matter now, apart from other factors?

Mr. Birch: The point I was making was that both in 1919 and 1935 there was no consultation. In fact, in 1935 the decision of the Government of the day was welcomed.

Mr. Marlowe: Is it not the case that the original idea was that these pensions should be adjusted to the cost of living? Would my hon. Friend not agree that the changes in the cost of living in the last 10 or 15 years have made these pensions wholly inadequate in present circumstances?

Mr. Birch: I believe we shall be having a debate on this matter on Friday week. Perhaps my hon. and learned Friend can raise the matter then.

Mr. Marlowe: asked the Parliamentary Secretary to the Ministry of Defence why his noble Friend has rejected the proposal to establish an advisory committee for the purposes of the pension and related problems of the retired officers of the Services and their widows; and what steps are taken to ensure that these retired officers and their widows are represented at discussions concerning such matters.

Mr. Birch: The reasons for my noble Friend's decision were explained in a letter to the Chairman of the Officers' Pensions Society dated 11th February, 1953, of which I am sending my hon. Friend a copy. The interests of retired Service officers and their widows are represented by those members of the

Board of Admiralty and the Army and Air Councils who are responsible for personnel administration in the Armed Forces.

Mr. Marlowe: Is my hon. Friend aware that the reasons given by the Minister of Defence were wholly unsatisfactory? Is it not the case that for retired officers to be represented by serving officers is unsatisfactory, because those serving officers have no idea of the unfortunate position in which pensioners now find themselves? They should have an opportunity of explaining to those concerned the very strong case they have for an increase.

Mr. Birch: I do not think it is right to say that the senior personnel officers are unaware of the circumstances. They are very often related to the retired officers and they know very well what is going on.

Mr. Shinwell: Now that the hon. Gentleman has intimated that there is to be a debate on Friday week on a Private Member's Motion, will he not make representations to his noble Friend that in view of the strong feeling which exists in all quarters of the House on this matter he should be put in a position in that debate to give a favourable reply to the complaints made?

Mr. Nicholson: Will my hon. Friend cause the letter to which he referred to be printed in HANSARD and not merely sent to his hon. and learned Friend the Member for Hove (Mr. Marlowe)?

Mr. Birch: I shall certainly consider that.

Following is the letter:
I am directed by the Minister of Defence to refer to the letters which you addressed on 13th January to him and to the Service Ministers asking for representatives of your Society to be included in consultations when the retired pay and pensions of officers, their widows and dependants are being discussed.
As you may be aware, certain members of the Board of Admiralty and of the Army and Air Councils are charged with the specific responsibility of representing the interests of officers in these matters. While the Minister will always be glad to consider any representations which may be made by your Society on these matters, he cannot undertake to consult the Society when the retired pay of officers of the Forces, or the pensions to be awarded to their widows and dependants are under discussion, since these are matters of


Government policy to be decided by himself and the Service Ministers in consultation with the Chancellor of the Exchequer.
As regards the practice in civil life, I am to point out that the machinery of consultation between the Official and the Staff Sides of the National Whitley Council for the Civil Service does not provide for the inclusion of representatives of retired Crown Servants or of their widows. While the Government is prepared to consider representations made by recognised outside bodies on behalf of State Pensioners, it cannot undertake to consult them. The Government consulted the local authorities last year before the introduction of the Bill for the Pensions (Increase) Act, 1952, as those authorities have to meet the cost of a considerable part of further pensions increase.

Prisoners-of-War, Korea (Information)

Mr. Driberg: asked the Parliamentary Secretary to the Ministry of Defence what steps are being taken to obtain from those recently repatriated information about the identity and welfare of other prisoners still in North Korea, to collate this information, and to communicate it to the next-of-kin concerned.

Mr. Birch: Care has been taken by those who interview repatriated prisoners of war to check up on the lists of prisoners. Information given has resulted in a number of casualties being re-classified; in such cases the next-of-kin are immediately informed.

COLONIAL WELFARE AND DEVELOPMENT FUND

Mrs. White: asked the Secretary of State for the Colonies what reply has been made to the proposal of the Colonial Development Corporation that certain projects that are of great value, but unlikely to be commercially profitable, should be accounted for on a different basis from the other projects undertaken by the Corporation.

The Secretary of State for the Colonies (Mr. Oliver Lyttelton): I would refer the hon. Member to the reply which my right hon. Friend gave to the hon. Member for Rugby (Mr. J. Johnson) on 20th May.

Mrs. White: Can the right hon. Gentleman tell us whether any conversations have been held with the chairman or members of the Board on this subject; and if it is impossible to carry out these

projects under existing legislation, according to the reply mentioned, have any other ideas occurred to Her Majesty's Government for carrying out agricultural settlement, for instance?

Mr. Lyttelton: The broad reply to the hon. Lady is that, where a proposition which has long-term benefit for the Colony is entirely uncommercial, it more properly comes under the Colonial Development and Welfare Fund.

Mrs. White: asked the Secretary of State for the Colonies what discussions have taken place with Colonial Governments on the future of projects and establishments which have received assistance from the Colonial Development and Welfare Fund; and if he will make a statement.

Mr. Lyttelton: I hope to make a statement on the matter in the near future.

Mrs. White: Is the right hon. Gentleman aware that this matter is becoming one of considerable urgency, because many of the persons in charge of this project are unable either to recruit further staff or to retain staff they now have?

Mr. Lyttelton: I am aware that it is a matter of urgency, although I should not put it as high as the hon. Lady, because the present funds will not be spent by the end of the present Act, by 1956. I quite agree that it is urgent, and I hope to make a statement in the near future. There are a good many things involved in this—things for the House itself.

Mr. J. Griffiths: Has the right hon. Gentleman received representations, particularly about that part of the fund provided for long-term research, which is really urgently required?

Mr. Lyttelton: That is one of the reasons I have pressed on with this matter. Apart from research, I do regard it as a subject upon which the House should be given information at an early date.

Oral Answers to Questions — COLONIAL DEVELOPMENT CORPORATION

Appointments

Mr. Rankin: asked the Secretary of State for the Colonies why he has not renewed the appointment of Professor


Arthur Lewis to the Colonial Development Corporation.

Mr. Lyttelton: I would refer the hon. Member to the reply given to the hon. Member for Eton and Slough (Mr. Fenner Brockway) by my right hon. Friend the Minister of State on 21st May, to which I have nothing to add.

Mr. Rankin: Has the Colonial Secretary decided who will succeed Professor Lewis in this appointment?

Mr. Lyttelton: No, not yet. This will be made public when the appointment has been made.

Mr. Rankin: In view of the present state of affairs, would the right hon. Gentleman consider appointing a non-white to this post?

Mr. Lyttelton: Appointments to the Board must, in the main, be decided by the commercial qualifications of those selected.

Mr. Fenner Brockway: Have the appointments of the other members of this Board been renewed?

Mr. Lyttelton: The appointments are what I think is called staggered, and I shall have to have notice of that to give the hon. Gentleman a satisfactory answer.

Chairman (Business Activities)

Mr. Dugdale: asked the Secretary of State for the Colonies the reasons which led him to permit Lord Reith to undertake business activities in addition to his work as Chairman of the Colonial Development Corporation.

Mr. Rankin: asked the Secretary of State for the Colonies what consultations he had with the Chairman of the Colonial Development Corporation before he accepted an appointment with a private firm.

Mr. Lyttelton: Now that Lord Reith has nearly completed his re-organisation of the Corporation both at headquarters and in the regions I saw value in a suggestion which he made some time ago that the Chairman, as in many large commercial organisations, should concentrate upon major questions of policy leaving the day-to-day administration to be carried out by the strengthened executive.
I therefore felt able to agree that the post of Chairman need no longer exclude the acceptance of two or three private directorships. I welcome this move, since it will keep the Chairman in closer touch with the business world outside the Corporation. The re-organisation of the executive will be completed in the autumn, and thereafter Lord Reith's salary as Chairman will be £3,500 p.a. instead of £5,000. He has assured me that he will still regard the Corporation as having the first claim upon his time and energy.

Mr. Dugdale: Before coming to this decision, did the right hon. Gentleman discuss the matter with the Prime Minister, and did both of them consider the effect this would have on the chairmen of the boards of other corporations? May we now assume that the chairmen of the National Coal Board and of the Electricity Authority and any other board may take directorships as and when they like?

Mr. Lyttelton: Of course not. The right hon. Gentleman is not justified in assuming anything other than what I have said. If he will look at the record of the Colonial Development Corporation under the auspices of the previous Government he will see that it is highly desirable that the Chairman should have closer touch with the outside world.

Mr. J. Griffiths: I gather, from the right hon. Gentleman's reply, that he has consented to Lord Reith's taking two or three directorships outside the Corporation. Is he able to tell us how much time each day and each week he will now be able to give to the Colonial Development Corporation?

Mr. Lyttelton: Lord Reith will continue giving the whole of his time to the affairs of the Colonial Development Corporation, subject to attending, I suppose, one board meeting or two a month of those companies.

Mr. Shinwell: Would it not be very useful if members of the Government, including the right hon. Gentleman, had closer contact with the outside world so that they could know what public opinion thinks about this decision?

Mr. Lyttelton: It is very easy to arouse prejudice on this matter, and I am not


surprised that the right hon. Gentleman is trying to do it. However, there are roughly two systems under which joint stock companies are managed in this country. One is by having a whole-time chairman, who is the chief executive, and the other is by having somebody who is in touch with the outside world, and the day-to-day business, in the majority of cases, is carried on by the executive.

Mr. Dudley Williams: Is it the fact that during the administration of the late Government the Chairman of the Colonial Development Corporation, at the same time as he was the Chairman, held several directorships in private business?

Mr. Lyttelton: Yes, that is so, I believe.

Mr. Rankin: Is the Colonial Secretary aware that he has now decided to reverse a decision of Parliament without previously consulting this House, which decided that this was a full-time job? He has now decided it is a part-time job. Does he really think that that is in the best interests of the Colonial Development Corporation?

Mr. Lyttelton: If it is not in the best interests of the Corporation, why did the last Government permit Lord Trefgarne to hold outside directorships? [Interruption.] If everybody got a knighthood who contradicted the right hon. Gentleman the Member for Easington (Mr. Shinwell) we should have a very full House of them indeed.

NIGERIA (CONSTITUTION)

Mr. Hector Hughes: asked the Secretary of State for the Colonies the causes of the present unrest in Nigeria; and what steps he is taking to remove them.

Mr. Lyttelton: I would refer the hon. and learned Member to the statements on the constitutional situation in Nigeria which I made in the House on 22nd April and 21st May.

Mr. Hughes: Will the right hon. Gentleman tell the House his plans for solving the fundamental root causes of this disturbance; and does he realise that the causes will not be solved merely by force?

Mr. Lyttelton: It is not a question of force that arises. The present proposals I have made are for a conference upon the constitutional position to be held in London. The root causes of this thing, to which the hon. and learned Gentle, man refers, go beyond the power of anyone entirely to eradicate.

Mrs. White: Can the right hon. Gentleman inform the House what his hopes are in approaching this conference?

Mr. Lyttelton: I cannot yet, no. The conference will probably be convened. So far, as the hon. Lady knows, two people I have invited have refused to come, and I am making further representations to them.

Mr. J. Johnson: asked the Secretary of State for the Colonies if he will make a statement regarding the replies he has received from Dr. M. Azikiwe and Mr. O. Awolowo to the invitation to discuss the redrafting of the Nigerian Constitution.

Mr. T. Reid: asked the Secretary of State for the Colonies if he will make a statement in respect to the recent developments of the Nigerian constitutional problem.

Mr. Lyttelton: In pursuance of the statement which I made in the House on 21st May, the Governor issued invitations at the end of last last month on my behalf to representatives of each Region to the proposed conference in London. Those invited included Mr. Awolowo and Dr. Azikiwe. Some acceptances have already been received. Mr. Awolowo and Dr. Azikiwe declined the invitations for reasons already made public.
The Governor has now appealed to them to reconsider their decision and has assured them that the full exchange of views which the proposed conference will render possible would not be confined to the method of revising the constitution. He has pointed out that each representative would be able to indicate to me both in what respects, in his opinion, the present constitution is unsatisfactory and in what particulars it should be re-drawn, and has said that if there is a sufficient consensus of opinion the conclusions could be used in any discussion for a settlement of the constitutional difficulties. Their replies are awaited.

Mr. Johnson: Does the Minister agree with me that the future behaviour of these two gentlemen is not likely to change? In the event of deadlock, where do we go from there? Is it not likely that they will also refuse to work in the Western House at Ibadan and the Eastern House at Enugu? Where do we go beyond that? Does it not mean that we are coming to an impossible situation in Nigeria?

Mr. Lyttelton: I do not think this situation will be improved by my attempting to answer hypothetical questions concerning a situation which has not yet arisen. I must confine myself to issuing these invitations and to saying how desirable it is that these gentlemen should come.

Mr. J. Griffiths: While we realise that the attendance of two important leaders of this kind would be essential as well as desirable, do I gather from the right hon. Gentleman's reply that the Governor has been inviting the two leaders of the political parties, indicating to them that if they come to the conference they can put forward their point of view and it will be considered? Have they been told that they will be entitled to put forward their ideas about the future constitution if they come to the conference?

Mr. Lyttelton: The Governor said that specifically but the very invitation to a conference means asking somebody to come to put his views before the conferance. It would be a farce to call a conference and then to say that nobody was allowed to express his views.

Mr. T. Reid: Have the representatives from the Northern Provinces agreed to attend?

Mr. Lyttelton: I am without advice about how many have now accepted invitations, but I shall be quite prepared to answer a Question on the subject early next week.

MAURITIUS (PUBLIC SERVICES COMMISSION)

Mr. Rankin: asked the Secretary of State for the Colonies to consider appointing a public services commission in Mauritius.

Mr. Lyttelton: A Bill to establish a public service commission and to give the Governor power to appoint the chairman and members of the commission was published in Mauritius last month in preparation for its introduction into the Legislative Council.

Oral Answers to Questions — MALAYA

University (Chinese Department)

Mr. Ian Winterbottom: asked the Secretary of State for the Colonies whether the head of the Chinese department of the University of Malaya has yet been appointed.

Mr. Lyttelton: The University of Malaya is an autonomous body. Appointments within it are governed by the Constitution and Statutes and made by the Council. I am, however, making inquiries about this matter and will write to the hon. Member about it.

Mr. Winterbottom: Is the Secretary of State not aware that the advertisement for the head of this department was made in 1951, and that as a result of the delay wealthy Chinese are coming forward with offers to create a Chinese University, which surely runs counter to our policy in Malaya?

Mr. Lyttelton: That goes rather beyond the hon. Gentleman's Question, which asks whether the head of the Chinese department has yet been appointed. As I say, the university is an autonomous body, and I am making inquiries about it.

Mr. Winterbottom: Is the Secretary of State aware of the results of this delay?

Mr. Lyttelton: That is a matter of speculation.

Whitley Councils

Mr. Ian Winterbottom: asked the Secretary of State for the Colonies why Whitley Councils have not been formed in the Federation of Malaya; and when the Government propose to take action in this matter.

Mr. Lyttelton: Whitley Councils have been formed in the Federation of Malaya. I gave some particulars in my reply to the hon. Member for Bristol, Central (Mr. Awbery) on 22nd April, a copy of which I am sending to the hon. Member.

ALL CHINA PEOPLES' CONGRESS (ELECTIONS)

Mr. Ian Winterbottom: asked the Secretary of State for the Colonies whether he is aware that according to the new electoral law of China the overseas Chinese have been given the right to elect 30 members of the All China Peoples' Congress; and whether Colonial Governments will make it clear to Chinese residents that participation in these elections will automatically disqualify them for all citizenship rights in British territories.

Mr. Lyttelton: The new electoral law of China to which the hon. Member refers provides for the holding of separate elections by the overseas Chinese for the All China Peoples' Congress. The regulations governing these elections are to be enacted separately and I am not aware that they have yet been promulgated. The holding of Chinese elections outside China is not a new idea. The Chinese Nationalist Government proposed in 1947 to hold such elections in British territories but the proposal appears to have been dropped.
Participation in the election under the Chinese electoral law will not, under the British Nationality Act, 1948, which is in operation in the Colonies, automatically disqualify Chinese residents for citizenship in the United Kingdom and Colonies.

Mr. Winterbottom: Will the Secretary of State agree, however, that the Chinese in Malaya should make up their minds where their loyalty lies, and that this is perhaps an opportunity for the Secretary of State to help them to make up their minds on the subject?

Mr. Lyttelton: In the last year the Chinese in Malaya have made up their minds in overwhelming numbers to which side they belong.

Mr. S. Sirverman: When the right hon. Gentleman says that to take part in the Chinese elections in this way would not automatically disqualify the Chinese, is it clear that he is referring to a subsequent application to be a British subject, or does he mean it is possible for a man to be a British subject and still take part in the political election of a foreign Government?

Mr. Lyttelton: I was merely giving advice on what I believe to be the legal position, which is that participation in the elections would not disqualify a Chinese resident from citizenship.

Oral Answers to Questions — NYASALAND

Chief Gomani (Deportation)

Mrs. White: asked the Secretary of State for the Colonies to make a statement on the banishment of Chief Gomani by the Governor of Nyasaland.

Mr. Dugdale: asked the Secretary of State for the Colonies the reasons for which Paramount Chief Gomani has been banished from his own district in Nyasaland.

Mr. J. Johnson: asked the Secretary of State for the Colonies the reasons for the arrest and banishment of Acting Paramount Chief Gomani of Nyasaland.

Mr. Lyttelton: Chief Gomani was suspended as a Native Authority on 19th May when he refused to withdraw a written notice inciting his people to breaches of the agricultural laws and urging them not to pay their taxes. He was required to leave the district and when he refused a deportation order was signed by the Governor. He resisted the enforcement of the order, and was taken away under escort in a car: he started a struggle with his guards and succeeded in escaping into Portuguese territory. He was handed back by the Portuguese authorities, arrested as a result of his resistance to the police, and is now being held on remand.

Mrs. White: Does that mean he is to be brought to a public trial; and, if so, can we be given an idea before what body the trial will be held?

Mr. Lyttelton: I imagine that he will be brought to trial in the ordinary way, for breaches of the law. I might also add, for the benefit of the hon. Lady, that deportation in the context in which I have used it means removal from one district to another in the same territory.

Mr. Dugdale: Would the right hon. Gentleman give a little further information about this matter of resistance and struggle, in view of the fact that Chief Gomani is an elderly gentleman suffering


from Parkinson's disease, and that it is highly improbable that he could struggle very hard with anybody?

Mr. Lyttelton: There is no medical evidence to support what the right hon. Gentleman has said, but I have been at some pains to look into it and I can only say that in the confusion he succeeded in escaping.

Mr. J. Griffiths: Has the right hon. Gentleman's attention been called to a report in today's newspaper that Chief Gomani, who is one of the most influential chiefs in Nyasaland, is now under trial; and when the trial is over, will the right hon. Gentleman make a fuller statement of what has happened?

Mr. Lyttelton: I do not think the actual details of this fracas are of particular interest to the House, but if somebody likes to put down a Question I will go into it more fully. Our information is that Chief Gomani was only led into these errors by very strong pressure exerted upon him by Congress and others.

Mr. Griffiths: If Chief Gomani is to be tried, is it fair to him that statements of this kind should be made pending trial?

Mr. Lyttelton: The statement I have made, if the right hon. Gentleman will examine it in HANSARD, is certainly in mitigation of any action of which Chief Gomani has been accused.

Mr. S. Silverman: But he has not been convicted.

Mr. Lyttelton: Certainly. I do not think the use of the word "mitigation" is harmful. I said "of anything of which he is accused."

Chief Kawinga

Mr. J. Johnson: asked the Secretary of State for the Colonies why Chief Kawinga, from Nyasaland, was kept in a police station for a week preceding his departure for the Coronation, and was taken direct from there to the aeroplane.

Mr. Lyttelton: The hon. Member has been misinformed. Chief Kawinga left his village two days before his departure to the United Kingdom. He was unwilling to stay in Blantyre, for fear of intimidation, to which many opponents of federation are now resorting and he

gratefully accepted accommodation for two nights in a vacant house at the Police Training School, Zomba. He was naturally provided with a Government car to take him to the airport, but there was no police escort.

Mr. Johnson: I have a letter from a European of the highest integrity whom I know personally, and if I show this letter to the right hon. Gentleman will he agree to think again about this matter and to speak to me in a somewhat different fashion?

Mr. Lyttelton: I am only too glad of any opportunity to talk to the hon. Gentleman at any time on any subject, but I am afraid that any letters which he produces will not alter my opinion or what I have said because I have all the facts categorically put down and I can support them with documents, if need be.

Oral Answers to Questions — WEST INDIES

Antigua (Sugar Cultivation)

Mr. D. Jones: asked the Secretary of State for the Colonies whether he is now in a position to state how many areas of land there are in Antigua, West Indies, still lying uncultivated; how much of this land is suitable for growing sugar cane; and what steps he and the local Government are taking to bring this land into cultivation, to increase the supply of sugar cane and increase the earning of the native population.

Mr. Lyttelton: Much of the uncultivated land in Antigua is unsuitable for cane production as the soil is too thin. About 600 acres along the south coast could grow cane, but not enough to justify the heavy capital expenditure on road and rail which would be necessary to get out the cane. A land utilisation survey by the Antigua Government will help to determine what crops can best be grown with profit to the people.

Federation Conference (Report)

Mr. R. Robinson: asked the Secretary of State for the Colonies when the report by the recent conference on West Indian federation will be available.

Mr. Lyttelton: The Report is being published today as Command Paper No. 8837. Copies are available in the Vote Office.

Mr. Robinson: While congratulating my right hon. Friend on the undoubted success of this conference, may I ask him to bring it to the notice of the Governments of British Guiana and British Honduras so that they may have a further opportunity of considering the advantages of federation?

Mr. Lyttelton: I hope they are in touch with the outside world.

Oral Answers to Questions — TANGANYIKA

Abattoirs

Mr. Hastings: asked the Secretary of State for the Colonies whether his attention has been called to the bad conditions obtaining in many abattoirs in Tanganyika and to the unnecessary cruelty to animals resulting; and what steps it is proposed to take in the near future to improve the conditions and reduce the cruelty involved.

Mr. Lyttelton: My attention has not been drawn to this. If the hon. Member cares to furnish me with information about instances of avoidable cruelty I will ask the Governor to look into the matter.

Mr. Hastings: If I send the right hon. Gentleman photographs which I have in my possession showing the dilapidated condition of these premises, and the blood and filth and offal lying about, will he have a careful look at them and make inquiries?

Mr. Lyttelton: I shall not only look at them, but I shall make representations.

Coal Deposits (Development)

Mr. R. Robinson: asked the Secretary of State for the Colonies in view of the fact that the Colonial Development Corporation's Tanganyika Coalfields Investigation has now proved reserves of over 200 million tons of coal in the Mchuchuma, Mbalawala and Mbuyura areas, what plans are being prepared to construct a railway to those areas; and how it is hoped to finance such plans.

Mr. Lyttelton: A survey has been made of two possible routes from the coast. It is estimated that the more direct line would cost £10 million, the other £20 million. Both would take six years to

construct. The next step is to show whether the export prospects for the coal, and other products from this zone of Tanganyika, can sustain this investment. This is being studied by the Tanganyika Government and I await their views.

Mr. Robinson: In view of the importance of the mineral development of Tanganyika, will my right hon. Friend do all he can to stimulate the opening of communications to those areas?

Mr. Lyttelton: These two subjects are interlocked. It is highly desirable that this coal should be exploited but that will depend economically on whether we can find a sufficiently large market for exports.

Mr. J. Griffiths: Is it not true that the discovery of this coal, which can be and will be of very great importance to this territory, was one of the fruits of the Colonial Development Corporation under the late Administration?

Mr. Lyttelton: Certainly it was, and it is a most unfortunate piece of bad luck that this very important deposit should be rather inaccessible. That is the only thing which is holding back its development, and we must always examine that point when we are trying to exploit it. I am far from saying that the Colonial Development Corporation had no successes. Unfortunately Questions are generally addressed to me on their failures.

Mr. Nabarro: Will my right hon. Friend bear in mind the analogy of the Wakkie coalfield in Southern Rhodesia where development of the whole of the minerals in that part of Africa has been retarded by the absence of any form of rail communications other than through Portuguese territory? If the railway is built first, should we not get the coal out very much more quickly than through relying on present facilities?

Mr. Lyttelton: The problems which have to be studied will be clear to all hon. Members.

Mr. Snow: Is the right hon. Gentleman aware that the development of coal deposits in Tanganyika has been frustrated for many years—I think I am right in saying from 1925 or 1926—and that the economy of Tanganyika has thereby been


jeopardised. Is he satisfied that the Development Corporation or the Welfare Fund are the appropriate bodies to finance this possible development?

Mr. Lyttelton: When the hon. Gentleman says "frustrated," I think he should bear in mind that this development is inaccessible, and that is causing the frustration. I do not think the Colonial Development Corporation or the C.D. and W. Fund are necessarily the only ways to be able to finance the railways. I think that is a matter more appropriate for a loan, if the position warrants it.

Mr. Woodburn: Would the Government not lose their sense of proportion in this matter but keep in mind that in Fife and the Lothians there is great possibility of development of coal resources which might require development at much less expense?

Oral Answers to Questions — WORLD PEACE (CONFERENCE)

Mr. Hector Hughes: asked the Prime Minister how far arrangements have progressed towards the holding of a four-Power conference between representatives of Britain, the Union of Soviet Socialist Republics, France and the United States of America.

Mr. Donnelly: asked the Prime Minister whether he will make a further statement regarding the possibility of a four-Power conference.

The Prime Minister (Sir Winston Churchill): I have nothing to add to the reply which I gave on this subject yesterday to the right hon. and learned Gentleman, the Member for Rowley Regis and Tipton (Mr. A. Henderson).

Mr. Hughes: Is it not a fact that the Prime Minister led this House to believe that not only he but also the Prime Ministers of the Dominions were impressed by the importance and urgency of such a conference at an early date? Has he departed from that? If not, will he take steps to pursue it and bring about such a conference?

The Prime Minister: Perhaps the hon. and learned Member did not hear what I said: I have nothing to add to the answer which I gave on this subject yesterday to the right hon. and learned Gentleman, the Member for Rowley Regis and Tipton.

Mr. Hughes: On a point of order. The Prime Minister said that perhaps I did not hear his reply, but the shoe is on the other foot, for it was the Prime Minister who did not hear me.

Mr. Speaker: There is no point of order in that.

Mr. Donnelly: Has the Prime Minister anything further to say about the dates of the Bermuda Conference, in view of the delay which has arisen in France?

The Prime Minister: I am awaiting with interest the development of the French political situation, and when we know what happens there it will be possible for me to deal with a question of this character.

Oral Answers to Questions — COMMONWEALTH PRIME MINISTERS' CONFERENCE

Lieut.-Colonel Lipton: asked the Prime Minister whether he will make a statement on the results of his recent discussions with Commonwealth Premiers.

The Prime Minister: I do not wish to enlarge upon the agreed statement which was issued yesterday. I will arrange that this should be printed in the OFFICIAL REPORT.

Lieut.-Colonel Lipton: If the Prime Minister is satisfied that there is a real and genuine demand for more information, will he consider whether it will be possible to give the House and the country more information than hitherto has been given and, in particular, can he say anything about the reported unanimity of view among the Commonwealth Premiers in support of his plea for high level consultations with the Soviet Union at the earliest possible moment?

The Prime Minister: Great pains were taken in the preparation of this document. It is remarkable, when we consider that it represented, I suppose, the opinions of nearly one-quarter of the whole human race, or something like that—very remarkable. I was very glad that there was such a full measure of agreement considering all the different conditions under which we meet. I think it should be very carefully studied and reflected upon. I do not wish at the present time to make any special comments. I think it should be


included in the Reports of the House to give all hon. Members the fullest access to the authentic document.

Following is the statement:

Oral Answers to Questions — MEETING OF COMMONWEALTH PRIME MINISTERS

Final Communiqué

The final plenary session of the Meeting of Commonwealth Prime Ministers was held this afternoon.

The Prime Ministers have met at a time of general rejoicing. The presence at the Coronation of representatives of all parts of the Commonwealth has illustrated the unity and the variety of the Commonwealth association of which Her Majesty is the Head. The discussions which the Prime Ministers have held have once more demonstrated the concord which exists between all the Governments and peoples of the Commonwealth, despite their varying interests and circumstances, in their approach to the major problems of the world today.

This sense of concord has been strengthened by the discussions of the past week. These have enabled the Prime Ministers to undertake a comprehensive and realistic review of the international situation; and there has been a personal exchange of views which will help all the Commonwealth Governments to continue their conduct of foreign relations with renewed understanding of the policies and interests of their partners in the Commonwealth.

The Prime Ministers found it specially valuable to have this opportunity for personal discussions so shortly before the proposed meeting at Bermuda between the Prime Minister of the United Kingdom, the President of the United States and the Prime Minister of France. They reviewed the state of relations with the Soviet Union and agreed that no opportunity should be lost of composing, or at least easing, the differences which at present divide the world. But they recognised that the democracies must maintain their strength and exercise unceasing vigilence to preserve their rights and liberties.

The Prime Ministers reviewed recent developments in Western Europe. The Commonwealth countries associated with or interested in the North Atlantic Treaty Organisation expressed the hope that the European Defence Community would be established at the earliest possible date.

The Prime Ministers followed with close interest the concluding phases of the armistice negotiations in Korea. They noted with gratification that long and patient labours have now led to the conclusion of an agreement on prisoners of war and thus made way for the early signature of the Armistice Agreement. They exchanged views on the steps which will have to be considered after the end of hostilities in Korea for the promotion of stability and progress throughout the Far East and South East Asia.

The current problems of the Middle East were also discussed. The Prime Ministers

recognised the international importance of the Suez Canal and of the effective maintenance of the military installations in the Canal Zone. They agreed that it is in the common interest that the outstanding issues in the Middle East should be settled on the basis of ensuring the peace and security of the Middle East countries, consistently with the sovereignty of each, and promoting their social and economic development.

The Prime Ministers reviewed developments in the economic field following the Commonwealth Economic Conference of December, 1952. They agreed that the Commonwealth countries should adhere firmly to the long term objectives and lines of policy then laid down. In the meantime it was essential to take advantage of the improved outlook for the sterling area by continuing to strengthen the economy of each of the countries concerned. Particular attention was given to the need for stimulating economic development, for expanding exports and, consistently with the maintenance of adequate reserves, for removing progressively restrictions on trade over as wide an area as possible and especially within the Commonwealth and the sterling area.

Throughout this Coronation period the Prime Ministers have taken advantage of many opportunities for informal talks on matters of particular interest to two or more countries and on general subjects which have not been discussed in the plenary sessions. Although those sessions are now over, some of the Prime Ministers will be remaining in London for a further period during which these exchanges will be continued.

Oral Answers to Questions — KENYA (KIKUYU TRIBESMAN'S DEATH)

Mr. Hastings: asked the Secretary of State for the Colonies whether he is aware that on 29th January last Elijah Njeru Gideon died from shock resulting from multiple injuries inflicted by beating carried out under orders, with a view to obtaining information as to the whereabouts of hidden firearms used by a Mau Mau gang; how far such action is sanctioned by existing regulations; and what action he proposes to take to punish those who ordered it.

Mr. Lyttelton: I would refer the hon. Member to the reply circulated by my right hon. Friend the Minister of State for Colonial Affairs on 22nd May. The police investigation into this death has been completed and the Attorney-General is considering legal action against those responsible.

Mr. Hastings: Does the right hon. Gentleman regard this as a unique case


or have other cases been reported to him in which torture has been used to try to secure confessions?

Mr. Lyttelton: There are two other cases under investigation now, speaking from memory. I do not want to add anything about it while the Attorney-General is considering what action is appropriate, but I can assure the hon. Gentleman that where allegations are made we shall seek most diligently to get any evidence to bring any malefactors to justice.

Mr. Fernyhough: Could the right hon. Gentleman make clear to those in authority that we in this country will not countenance treatment of that kind? [HON. MEMBERS: "He has said that."] He did not say it; he said there was an investigation.

Mr. Lyttelton: The hon. Member should be reminded that the Government in Kenya have on two occasions issued a public circular in which it was stated that this brutality was entirely against their policy and that anybody who was guilty of it would be prosecuted with vigour.

Oral Answers to Questions — NEWDIGATE COLLIERY ACCIDENT

Mr. Bowles: (by Private Notice) asked the Minister of Fuel and Power whether he has any statement to make about the mining accident which occurred yesterday at Newdigate Colliery, near Nuneaton, when three miners are reported to have been killed and 59 injured.

The Minister of Fuel and Power (Mr. Geoffrey Lloyd): Yes, Sir. I deeply regret that an accident on an underground man-riding train at Newdigate Colliery, Nuneaton, led to the death of three men, but I am glad to say that fewer men were injured than the number first reported. Twelve men were sent to hospital but nine have since gone home.
On present information the accident appears to have been caused by the breaking of a steel rope, but H.M. Inspectors are still engaged in detailed investigation into the cause of the accident and I am awaiting their report.
I am sure the House will wish to express sympathy with the relatives of the men who have lost their lives.

Mr. Bowles: May I associate my constituents with the expression of sympathy which the right hon. Gentleman has just uttered? This gradient is about 1,000 yards long, and I understand that the man-riding train had gone up about 600 feet when this rope broke and all these trucks ran backwards. May I ask the Minister, in view of the fact that this is a one-in-six gradient and that other ropes are vertical in taking men and coal to the surface, whether he can tell us what the law is concerning the regular examination of these ropes which seem to be the chief factor involved in this matter?

Mr. Lloyd: I am told by Her Majesty's Inspectors that the gradient is one-in-eight and that the car had not proceeded up as far as appeared in the Press reports but had only gone 10 to 12 yards up the gradient. With regard to the question of examination, there is a general requirement under the Coal Mines Act, 1911, that all gear, including these steel ropes, should be examined once a week.

Mr. Bowles: May I express my gratitude to learn that the injuries were nothing like so serious as reported in the Press, which is all I had to go on for my information? But this shows how serious the accident might have been if the train had gone up to 600 feet.

Mr. Noel-Baker: Will the right hon. Gentleman consider whether anything can be done by regulations to have a duplication of the steel ropes or some other method of avoiding such accidents?

Mr. Lloyd: As the House knows, we are in fact engaged on a new Safety in Mines Bill, and I intend to examine this point, particularly to see whether the requirements need to be strengthened.

PRIVATE NOTICE QUESTIONS

Mr. Driberg: I am grateful to have the opportunity of seeking your guidance, Mr. Speaker, on a matter which seems to affect the right of Private Members to submit Private Notice Questions for your consideration.
Yesterday, Mr. Speaker, I sought to submit for your consideration a Private Notice Question to the Foreign Secretary


on the detention by the United States authorities of Mr. Cedric Belfrage, a British subject resident in the U.S.A. for many years and now detained on Ellis Island without the hearing of any charges and without bail.
I was informed that it was not possible for you to consider a Private Notice Question yesterday as you had gone to the Thanksgiving Service at St. Paul's Cathedral; and I was asked to defer the submission of my Private Notice Question for one day, until today. I must in fairness explain that it was made quite clear to me by your Secretary that if I did agree to this delay there was no guarantee that the Question would be accepted by you; but, on the other hand, I was also assured that my right to submit it as a question of urgency would not be prejudiced by this short delay.
Accordingly, I submitted the Question today—only to receive a note from your Secretary as follows:—
I am asked by Mr. Speaker to say he regrets he cannot accept your Private Notice Question about the treatment of Mr. Cedric Belfrage, as there is already a similar Question on the Order Paper for Friday, 12th June.
On looking at the Order Paper I find that this Question was handed in yesterday by the hon. Member for Norfolk, South (Mr. Baker). The hon. Member has put it down, as he is perfectly entitled to do, for non-oral answer next Friday. Since it was handed in yesterday, this Question was, of course, not on the Order Paper at the time at which I was asked by your office to defer the submission of my Private Notice Question for one day without prejudice to my right to submit it.
I realise, Mr. Speaker, that there has been what may be described as an unfortunate series of coincidences—unfortunate for a British subject who may have to remain in detention for some days more before his case can be raised in this House, and then without the benefit of supplementary questions; more fortunate, perhaps, for the Foreign Office Ministers who may thus be saved embarrassment. But I do submit to you with great respect, Mr. Speaker, that it is also unfortunate that your attendance at a function—which in itself we are all very glad indeed that you should have attended—should have

the incidental effect of interfering with the ordinary processes of this House and the rights of its Members; and I would ask you to be good enough to indicate what steps can be taken to meet this difficulty.

Mr. Speaker: This is, as the hon. Gentleman has said, a concatenation of unfortunate circumstances. I was away yesterday at Church. I am never away except on duty of one sort or another, and therefore I knew nothing of the hon. Member's Question until the House sat. This morning when he resubmitted it, it was, I felt, estopped by the rule which says that if there is a Question on the Paper it is incompetent to allow a Private Notice Question. I do not know what remedy the hon. Member has got. I ought to say also that, on the merits of the hon. Member's Question, I do not say that I would have allowed it as a Private Notice Question. The real lesson for me seems to be not to go to church in the morning.

Mr. Driberg: With great respect and gratitude for what you have said, Mr. Speaker, there are two possible alternatives. One—which you might consider in due course, not, of course, today—is whether in such a very rare case it would be possible for some alternative procedure, such as the consideration of Private Notice Questions by your Deputy. Secondly, if you thought that, on merit, a Question was acceptable—in view of the fact that a British subject is eagerly awaiting bail and release day after day —if the Foreign Office spokesman were willing to answer it today, you might cut the Gordian knot by allowing it to be answered forthwith.

Mr. Speaker: I will consider what the hon. Member has said.

Mr. S. Silverman: I take it that the object of the original rule that there cannot be a Private Notice Question where there is a Question on the Order Paper is to avoid duplication of Questions, but does that principle apply when the Question on the Order Paper is for non-oral answer? If a Question is on the Order Paper for non-oral answer there is no opportunity whatever for supplementary questions in the House or for a statement in the hearing of the House. Therefore, it would look, in principle, as if the presence on the Order Paper of a Ques-


tion for a non-oral answer ought not to impede, in a proper case, an hon. Member who got your permission for asking a Private Notice Question on the same subject, having regard to the difference in procedure in the two cases.

Mr. Speaker: I think there is no difference in principle between a Question for oral answer and one for non-oral answer. Very frequently Questions for oral answer which appear on the Order Paper for the day with the appropriate asterisk are not reached. I see no difference in principle in that matter. The object of the rule is not only to prevent duplication of Questions but also, to some degree, to preserve the right of the hon. Member who has put the Question down.

KENYA (AFRICAN UNION)

Mr. Fenner Brockway: I also rise to a point of order, Mr. Speaker. Yesterday I asked you whether I might put down a Private Notice Question regarding the proscription of the Kenya African Union by the Governor of Kenya, and you stated you were unable to accept the Question. I then asked you whether I should be entitled to move the Adjournment of the House on that issue as a matter of urgent public importance today, when it was anticipated that there would be an answer by the Secretary of State for the Colonies on the Question about Kenya. You then replied, through your Secretary, that that request would not be prejudiced. The point of order which I wish to put to you is this. As the Secretary of State for the Colonies is now to make his statement tomorrow, shall I still be permitted, in view of the statement having been postponed, to ask for the Adjournment of the House tomorrow?

Mr. Speaker: I think the answer to the hon. Member's Question is "Yes." Of course, I cannot forecast what my Ruling will be on the matter, but I will certainly give it most careful consideration. If he receives a statement tomorrow, the hon. Member can move the Adjournment of the House upon it. I should not consider prejudicing his doing that on a matter of time, because he gave me notice about it yesterday.

BUSINESS OF THE HOUSE

The Lord Privy Seal (Mr. Harry Crookshank): After the business already announced for today, we shall ask the House to take the Committee stage of the Valuation for Rating Money Resolution.
Proceedings of the Committee on Valuation for Rating [Money] exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Crookshank.]

SCOTTISH ESTIMATES

Committee of Supply discharged from considering the Estimates set out hereunder and the said Estimates referred to the Scottish Standing Committee:

Class V, Vote 15, Department of Health for Scotland.

Class V, Vote 16, National Health Service, Scotland.

Class VIII, Vote 11, Department of Agriculture for Scotland.

Class VIII, Vote 12, Department of Agriculture for Scotland (Food Production Services).

Class III, Vote 17, Approved Schools, Scotland.

Class IV, Vote 13, Public Education, Scotland.—[Mr. Crookshank.]

Orders of the Day — FINANCE BILL

Considered in Committee [Progress, 20th May].

[Sir CHARLES MACANDREW in the Chair]

Clause 9.—(GENERAL PROVISIONS AS TO RATES OF PURCHASE TAX.)

3.42 p.m.

The Chairman: It would probably be for the convenience of the Committee if the first two Amendments, in page 6, line 9, to leave out "twenty-five," and to insert "sixteen and two-thirds," and in page 6, line 9, to leave out "fifty," and to insert "forty-five," were discussed together, with a Division being taken on the second one afterwards, if desired.

Mr. Hugh Gaitskell: We had originally contemplated, Sir Charles, that there would be two debates, but I can see that there are certain advantages in taking the two Amendments together, in particular so far as the subject of textiles is concerned. Whereas garments carry a 25 per cent. rate of tax, cloth carries a 50 per cent. tax. In the circumstances we have no objection to proceeding as you suggest, although we reserve the right to divide, if we so desire, on either Amendment at the end of the debate.

Mr. Anthony Greenwood: I beg to move, in page 6, line 9, to leave out "twenty-five," and to insert "sixteen and two-thirds."
The Committee will appreciate that the Amendment covers a wide range of goods, and a further wide range is covered by the second Amendment. I want particularly, however, to draw attention to the effect of the Purchase Tax upon the textile industry and I want to give expression to the sense of disappointment and the dull anger which has pervaded the textile areas at what is believed to be the Chancellor's incomprehension of the problems of the textile industry.
To talk about "dull anger" is not the fanciful, colourful expression of a politician. It is rather the apt expression of a very experienced and hard-headed practical man of business in Mr. Ormrod, the managing director of Vantona

Textiles, one of the largest firms in the industry. The expression "dull anger" was used by him in a letter to the "Financial Times" which appeared on 22nd April.
I do not want to go over again the arguments which we advanced last year on this problem, nor do I wish to gloat gloomily over the way in which the prophecies which we made on that occasion have been justified by subsequent events, but I notice that the directors of Vantona, Limited, at their annual meeting yesterday, commented on the way in which the prophecies of last year had been justified by experience. The approach that we are making to the problem is not a doctrinaire one. It is the approach of responsible newspapers and also of a number of extremely responsible groups of firms and individuals in the textile industry.
I want to draw attention particularly to the case which has been advanced by two very important groups of textile organisations. On 13th November the Cotton Board, in association with 16 other organisations in the non-wool textile industry, made certain representations to the Chancellor of the Exchequer. The 16 organisations included, for example, the Federation of Master Cotton Spinners, the Manchester Chamber of Commerce, the Rayon Weaving Association and the United Textile Factory Workers' Association, representing all the trade unions in the industry. Because of the lack of response to the representations which they had made, a very strong letter was sent by Sir Raymond Streat to the Chancellor of the Exchequer on 15th April. I doubt very much whether a stronger letter has ever been sent by the representatives of a whole industry to the Chancellor of the Exchequer in the last half century.
But they were not alone in making these representations. On 12th February another organisation, the Branded Textiles Group, made somewhat similar representations to the Chancellor of the Exchequer. The Branded Textiles Group is an organisation of 31 of the leading firms in the textile industry presided over by Lord Hollenden and having as its director Mr. Emrys Roberts who was well known to many hon. Members when he was the Member of Parliament for Merioneth until a short time ago.
The organisation includes the most important firms in the industry. It will give


hon. Members some idea of their importance if I tell them that the names of all the firms are household words throughout the world. They include Burberrys, Ltd., the Calico Printers' Association, Ltd., Courtaulds, Ltd.— which is not unknown to the Chancellor of the Exchequer—Horrockses Crewdson and Co., Ltd., the Jaeger Co., Ltd., Tootal Broadhurst Lee Co., Ltd., Wolsey, Ltd., and a large number of other firms in the textile industry. Their representations to the Chancellor of the Exchequer also went virtually unheeded, and Lord Hollenden, on behalf of that group, wrote another strongly-worded letter, to "The Times," which was published on 25th April this year.
In those circumstances it is surely not surprising that the "Manchester Guardian" should have expressed its dismay at the way in which the Chancellor was treating representations from the industry, and in a leading article on 16th April it commented:
There is room now for concerted pressure on the Chancellor to change his mind. He is not treating the textile trades fairly.
But where is that concerted pressure for which the "Manchester Guardian" asked? It is not coming from hon. or right hon. Gentlemen on the other side of the Committee. Where are the Conservative forces under the hesitant and inhibited leadership of the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton)? They have not turned up on the field of battle. It is true that in the Budget debate the right hon. Gentleman did sound his cracked clarion call to hon. Gentlemen on the other side of the Committee who represent Lancashire constituencies, but that is very different from turning up on the field of battle itself.
I do not think any of us were surprised to read in the "Manchester Guardian" a few days later that, although
The Conservative Members are well aware of the effects of the tax on the textile industry and heartily wish it were abolished … they have no wish to embarrass the Chancellor by importunity.
In fact, what happened was that these pinchbeck Napoleons ran at the first whiff of grapeshot directed against them by the Government Front Bench. I can assure the right hon. Gentleman the Member for Blackburn, West that his

attitude has not gone unnoticed in influential quarters in the county of Lancashire, because on 20th April the chairman of the Calico Printers' Association, Ltd., wrote to the "Manchester Guardian," and began his letter by saying:
Mr. Ralph Assheton's speech in the House on the Budget appears to indicate a fairly general approach to Budget matters which is dangerous and outdated.
That is a point of view put in a way which even my hon. Friend the Member for Blackburn, East (Mrs. Castle) could not have bettered.
Whatever we may think of the effete and supine attitude of hon. Members on the other side of the Committee, the Chancellor of the Exchequer himself at least is worthy of our respect. This is a most admirably framed Bill. In fact, it is so admirably framed that almost every Amendment we seek to put down appears to be out of order. We have tried to put an Amendment on the Order Paper to raise the D level on certain goods and exclude them from the burden of this tax. That I understand is most unlikely to be called. Many of us would have liked to exclude textiles altogether from the scope of Purchase Tax, and my hon. Friend the Member for Blackburn, East, whose sagacity and power of decision contrast very favourably with the right hon. Gentleman who is her colleague in the representation of the town of Blackburn, tried to put down an Amendment on those lines, but that, too, is unlikely to be called.
Therefore, we had to base our opposition upon the two Amendments which are under discussion at the moment. I appreciate that a tax of 16⅔ per cent. is too high for some commodities; it may well be that it is too low for others. I realise, too, that the suggestion of an all-round reduction of this kind will not be too popular in the case of those industries upon which Purchase Tax bears most heavily. That is the difficulty we are in with regard to the wide range of goods that is covered, and it has not been possible within the terms of the Bill to put down an Amendment which really adequately expresses the point of view which we should like to express.
In spite of the wide range of goods with which we had to deal, I want to speak almost exclusively about the position of the textile industry. I think


it would be unfair if I did not at this stage say a little about the present position of the industry. The Chancellor will probably agree with me that the position of the whole of the textile industry is a little obscure at the moment. It is true that the rayon and woollen sides of the industry are going through a period of apparent prosperity, and I think that that is true of the carpet side of the industry, too. Certainly, in the case of carpets and woollen fabrics a slight impetus was given to the industry by the fact that wool prices throughout the world are rising. How long that is going to last is a matter about which I think few of us would wish to be too dogmatic.
On the cotton side of the industry the position is a little bit patchy. Perhaps the most hopeful sign is that the production of yarn is back to about 85 per cent. of the record figure which it reached in 1951. A number of factors have conduced to that fairly satisfactory state of affairs. The ending of the buyers' strike released a good deal of purchasing power, which was of particular advantage to certain sections of the industry, and particularly, of course, to the waste section of the industry.
Government orders which were placed have brought a good deal of help to the industry, but they are already beginning to dry up, and they are not likely to be of any very sustained value during the next two or three years. The Coronation, too, I think, gave some temporary help, but I do not think that anybody would wish to be too positive about the future prosperity of the industry. Cotton people are constantly afraid that if raw cotton prices begin to fall that will have an effect upon the level of prosperity in the industry, and we submit that so long as Purchase Tax exists that, too, will be a detrimental factor working upon the industry.
In exports during the past year we have slipped back to fourth place; America, Germany, and Japan are becoming increasingly dangerous rivals and the ending of the ban on the import of cotton goods into many of our Colonies will tend to aggravate the situation, however inevitable that decision may have been. Already it is becoming difficult to export to many parts of the world the cheaper

and medium-priced goods on which we have depended to a large extent in the past.
On the other hand, we are making some slight progress in dollar markets, but there a factor of uncertainty has been introduced by the United States tariff policy and also by the fact that Purchase Tax militates against the production of better-class cloth. I have been fair, I think, in the general picture of the industry. Broadly speaking, I think it is true to say that the position at home is a precarious one and in the overseas markets we have to depend increasingly upon the better quality cloths and garments which we produce, and it is there that Purchase Tax is having a thoroughly unhealthy effect.
I am afraid it is too often assumed that the main argument against Purchase Tax is that it discourages the public from buying. Of course, it does discourage the public in that way, but much more serious is the effect of Purchase Tax upon the retailers, upon whom the even flow of trade largely depends. Retailers are unwilling to lay in stocks of goods upon which they will have to pay heavy taxes, because they know that if there is a substantial reduction in taxation they are left with a serious loss upon their hands. The result is that they tend to place their orders upon a hand-to-mouth basis. In their turn manufacturers are reluctant to develop new lines of cloth or new designs of garments if they feel that the retailers are going to order them only on this hand-to-mouth basis. Unfortunately, this uncertainty continues throughout the year, because, of course, the Chancellor at any time of the year can vary Purchase Tax by an order laid before the House.
It is this uncertainty which is doing the most serious damage to the industry. I have in my hand the current number of the "Drapers' Record" issued on 6th June. The leading article begins in this somewhat alarming way:
Although the next Budget is far ahead, one large store has already started a campaign to apprise suppliers of the serious dislocation of business expected early next year in view of the greater uncertainty which will exist regarding possible Purchase Tax changes and seek their help in alleviating the problem. Further, one of the country's biggest store groups has instructed its buyers to adopt a hand-to-mouth policy for spring merchandise carrying tax.


4.0 p.m.
At a later stage of our discussion in Committee my hon. Friend the Member for Blackburn, East and myself hope to move an Amendment, which I think will be in order, in regard to the payment of some rebate to retailers who are affected by a reduction in Purchase Tax on goods upon which they have already paid the tax. On that occasion, Sir Charles, we shall produce detailed figures in support of our case, particularly relating to representative department stores, to hardware shops, to radio dealers, and to footwear firms. In each of those cases the impact of Purchase Tax and its reduction is extremely serious, but I do not think that in any case it is as serious as the effect upon the textile industry itself.
I say that because we are seeing the result of that at the moment in the fact that the production of lines of textile goods which bear tax is being discouraged. At the same time there is a drive all the time to get the cost of goods down, often by lowering their quality, in order to get them below the D level. There is, therefore, a drift away from quality goods towards the cheaper and medium-priced goods, whereas the export future of the industry depends almost entirely upon the production of better class goods. The Branded Textiles Group has summed up the situation in this way. Referring to the D Scheme, it says:
In textiles, it has, in fact, failed to assist home demand for high quality merchandise and has driven that demand down to medium quality lines, the majority of which cannot compete successfully overseas. A further effect has been to compel manufacturers to lower the grades of their output to those at which tax does not apply.
In fact, all the things which we warned the Chancellor and the President of the Board of Trade last year would happen have happened during the last 12 months, and one sees evidence of this throughout the cotton industry. I understand that at the moment it is almost impossible to sell garments which are made of sea island cotton, and I hope that my hon. Friend the Member for Salford, West (Mr. Royle) will have an opportunity of enlarging upon that at a later stage of this debate. We are finding, too, that there is a tendency for us to buy more dollar cotton, which is used

for coarse spinning, and less Egyptian and Sudan cotton, which is used for finer counts.
There is throughout the industry a lowering of the counts in fine spinning and there is a reduction in the demand for fine single yarns and doubled yarns. The President of the Yarn Spinners' Association, Mr. Winterbottom, rightly drew attention to that in his speech to the annual meeting of the Association in April. In the document which Sir Raymond Streat, on behalf of the Cotton Board and the 16 organisations to which I have referred, sent to the Chancellor, he will find examples of the way in which the D Scheme and Purchase Tax have tended to distort the pattern of the textile industry. Those must be well known to the Chancellor and I hope he will have something to say about them when he replies to the debate today.
There is one further point in this connection. I am afraid that the desire to get goods down below the D level will tend at a later stage, when import restrictions are further eased, to make the importation of cheap foreign cotton considerably greater than it should be in the interests of Lancashire as a whole. The changes which have taken place in home production are, of course, having their effect on the export trade. I have already said that there is no question that the future of the export trade depends to a large extent upon the production of quality goods. It seems to me equally axiomatic that the development of export lines depends upon the existence of a healthy home market which makes a long run of production possible. I think the Chancellor will agree that this was the starting-point of the Douglas Committee.
It is an extremely expensive undertaking to develop a new fabric or a new range of fashion goods. That is why, if we are to have good quality articles available for export, it is vital that we should have a healthy home demand for them. Yet the entire policy of the Government has been to make the sale of these goods at home difficult, and, in consequence, to distort the pattern of our productive activity. The effect of that has been to place an additional burden upon the export trade.
In the document which Sir Raymond Streat sent to the Chancellor, he summed it up in this way:
Our foreign competitors, notably West Germany, France and Italy, far from discouraging the production of high-quality materials, give velvets and suchlike cloths every encouragement and actually subsidise exports. In Britain the effect of Purchase Tax is to impose a depressing burden on the better end of the trade. Those responsible for fiscal policy must realise that they are adding burdens of a most crippling character when they institute the D line running across the middle ranges, and on the better types a high Purchase Tax.
That seems to us to be a fair and reasonable way of summing up what has happened during the past year. In our submission it is a tragic situation because, if we lose export markets this year and next year, we shall probably have lost them for all time.
I wish that hon. Gentlemen opposite would have the courage to come out and support us on the line we are taking in this debate. If only they would do that, we could get this subject clear away from politics and we could get the Government to do something for the textile industry. It may be that hon. Gentlemen opposite prefer to bask in the wintry smiles of the Chief Whip rather than to save a place in the sun for Lancashire's textile industry. If so, I hope their point of view has been noticed and I hope this Committee will be aware of the unanimity of view among the manufacturers in the industry, the workers, the retailers and, I think, large sections of the general public who share the dull anger to which I referred in my opening remarks. I am glad, Sir Charles, to have had the opportunity of moving this Amendment this afternoon.

Mr. Ralph Morley: I wish to draw the attention of the Committee to another aspect of Purchase Tax than that which has been dealt with by my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood), namely, to its incidence upon the cost of school requisites.
We are discussing this afternoon a form of indirect taxation. In the long-ago days when I used to read books on economics, I was instructed by the writer of those books that indirect taxation was bad taxation because, to use

their own jargon, it was regressive taxation whose incidence pressed more heavily upon the poor than upon the well-to-do. For instance, the 'bus conductor pays as much taxation in the purchase of a pint of beer as the millionaire.
There are only two justifications for indirect taxation. One is that it has a sumptuary purpose and is meant to check consumption; the other is that it is convenient politically for the Chancellor to raise revenue without people noticing at the time that he is raising revenue. A man who smokes five ounces of tobacco a week pays 20s. for those five ounces, and of that 20s. probably about 16s. is tax. He is not very keenly aware of that when making his purchases, but if an extra 16s. were deducted from his pay packet at the end of the week for additional Income Tax, he would be very much aware of it and would be deeply resentful.
Neither of these two reasons for indirect taxation—that it has a sumptuary purpose or that it is a convenient method of raising revenue—can possibly apply to taxation upon school requisites. We do not want to discourage the consumption of school requisites. At present it is bound to increase, because we have 500,000 more children in our schools who have to be supplied with school requisites than we had two years ago. Nevertheless, something like 60 articles that are required in school are subject to Purchase Tax at the new rate of 25 per cent. They include copy books, exercise books, writing books of all kinds, needlework material, pictures and diagrams, and even the harmless but necessary chalk. It is estimated that last year something like £1 million was paid in Purchase Tax on school requisites.
The situation is aggravated by two things. First, there was Circular 242, in which the Minister of Education urged local authorities to cut their estimates for this year by 5 per cent.; and in trying to comply with that circular a number of local authorities have reduced their capitation grants; and so there is less per head per child per year to be spent upon supplying them with school requisites in those local authorities where the capitation grants have been cut. That makes the imposition of the Purchase Tax still more onerous.
It cannot be urged that this is a sensible method of raising revenue by the Treasury, because expenditure by local


authorities on Purchase Tax attracts grant from the Treasury. Of that £1 million which local authorities spend on Purchase Tax on the various requisites used in schools, from 60 to 70 per cent. is returned in the form of grant from the Treasury to the local authorities. The Treasury takes with the one hand and gives back with the other hand, and this does not seem to be a very clever method of raising revenue. On both those points, therefore, I ask the Chancellor of the Exchequer, not only to reduce the Purchase Tax on school requisites from 33⅓ per cent. to 25 per cent. but whether he can see his way to abolish altogether the tax on these items.
The Chancellor very properly yielded to the importunities of his Parliamentary Private Secretary and abolished the Entertainments Duty on cricket. I point out to the right hon. Gentleman that his Parliamentary Private Secretary is not only a distinguished cricketer, but is, or, at any rate, has been, a distinguished member of a local education authority. I am quite certain that if tradition allowed, he would rise in his place at the end of my speech to support my plea for a further reduction, or for the abolition, of the Purchase Tax on school requisites.
The Purchase Tax on school requisites was introduced by a former Financial Secretary to the Treasury who is now the Leader of the House. In introducing the tax on school requisites, the present Leader of the House said that he regretted very much having to tax such things but that he felt quite sure that very soon after the war had ended the tax would be remitted. It is now eight years since the end of the war and, unfortunately, the tax still remains.
4.15 p.m.
In addition, the right hon. Member for Blackburn, West (Mr. Assheton), who has already been mentioned in this debate and who is generally regarded on both sides as a financial authority, even though we may not always agree with his views, has said upon this subject that a tax upon stationery, including school stationery, is an inflationary tax and a tax upon production, and ought to be abolished. I have, therefore, weighty authority in asking the Chancellor of the Exchequer to consider this request.
It was argued on a previous occasion when this matter was raised that it was impossible to reduce the Purchase Tax on school stationery because it could not be differentiated from stationery used for commercial and other purposes. That difficulty could be overcome by removing altogether the tax on stationery. But if the Chancellor is not ready to go to those lengths and to remove altogether the tax on stationery, could he arrange that local education authorities should have a rebate on the money they spend on Purchase Tax?
Administratively, that is quite possible. The accounts of local education authorities are carefully kept and are audited by Government auditors, and it would be a simple matter of administration to arrange the amount of the rebate and for it to be given to the local education authorities. The Association of Education Committees has asked for this course to be pursued, and I hope that the Chancellor of the Exchequer, who must have a very real interest in this matter, will show sympathy towards the view that I am urging.
The right hon. Gentleman was, after all, the author of the greatest Education Act to be passed since 1900. In my opinion, the 1944 Act is the greatest Education Act of this century, and when fully carried out will have the most revolutionary consequences of any Education Act during that time. I regret that it is not yet fully carried out, but I have no doubt that when he introduced it the right hon. Gentleman intended that it should be carried out. I hope, therefore, that the Chancellor of the Exchequer, who must, naturally, have some sympathy with my plea, if he cannot abolish Purchase Tax on school requisites, will at least consider giving some rebate to the education authorities for the money they are forced to spend in this way.
Finally, at the request of the interests concerned, I should like to deal with another aspect of Purchase Tax: that is, the tax charged upon those strange and esoteric machines which are used for the beautification of ladies. I refer to hair-waving and hair-drying machines. I am informed that there is now a 25 per cent. Purchase Tax upon these machines and that the raw materials used in them are subject to a 75 per cent. tax. The hairdressers have written to me and say


that these machines are sold only to hairdressers. They are not sold to private households and commerce, and, therefore, are in a similar category to machinery used by manufacturers, which is not subject to Purchase Tax. Therefore, I ask that the remission of Purchase Tax on these machines should be considered. I am quite sure that the Chancellor of the Exchequer would not be ready to do anything which hindered or in any way prevented the glamourisation of the opposite sex, and in that spirit I commend this suggestion to him.

Mr. William Shepherd: I do not know what the hon. Member for Southampton, Itchen (Mr. Morley) knows about the effects of hairwaving machines but, in the interests of the well-being of the women of this country, it might have been a good thing if my right hon. Friend would consider putting a 100 per cent. tax on such machines. I have seen their effects and I hope that my right hon. Friend will not yield to the blandishments of the hon. Member and reduce the tax on them in any way.
I listened, as much as I could, to the speech of the hon. Member for Rossendale (Mr. Anthony Greenwood). I am sorry I was not able to hear it all as the abnormal traffic conditions in central London made me late getting here. I listened, however, to his plea for the textile industry, in which he and I have a mutual interest. I thought that to some extent he was unfair to my right hon. Friend and did not realise sufficiently that, after all, the present Chancellor is the man who has assaulted the Purchase Tax. It was the late Sir Stafford Cripps, let it be known, who really sanctified the Purchase Tax and made statements to the effect that it was here to stay. I think it unreasonable for hon. Members opposite to behave as if we on this side of the Committee and this Chancellor had been inflexible and as though we were really the authors of this tax.
No one dislikes the Purchase Tax more than I do. I think it easily the worst of all taxes, and its influence upon trade, design and quality is damaging to every industry it affects. I want to see its diminution as rapidly as possible and its elimination altogether. If we are to say, however, that there ought to be special revision for the textile industry, we have

to concern ourselves with what is to be the future intention of the Chancellor. Do we want the orderly, progressive and swift elimination of the tax? That is what I want. If we want to see the orderly, swift and progressive elimination of the tax it has to be done by broad stages and we cannot admit of any special cases unless those cases can show that they are more hardly hit by the conditions of the tax than other cases of a similar kind. I wish to put before the Committee four considerations which I think ought to be satisfied in our minds before we are able to agree to the idea of the textile industry in particular getting special treatment under Purchase Tax.
First, we have to prove that the textile industry, more than any other industry in its class of tax, is losing export trade through Purchase Tax. The second thing we have to prove is that the textile industry, more than any other industry in its class of tax, is being forced to debase quality. Third, we have to prove that the textile industry, more than any other industry in its class of tax, is losing home trade and, fourthly, that the conditions in the industry are so desperate that there is a real danger of the breakdown of the trade.
If the Committee will accept those propositions as a reasonable basis on which an exception should be made, much as I want to make the case for Lancashire in its strongest possible terms, I do not feel we can honestly and sincerely say that those conditions are fulfilled. Let us not deny for a moment that if there were complete absence of Purchase Tax the export trade would be easier, but it is not true to say that the existence of this tax is the main hindrance to exports of textiles. The main hindrance to exports at present is import restrictions in various markets to which we send goods.
Secondly, it is not true to say that the textile trade is debasing quality more than any other industry. I do not think, for example, that it is debasing quality as much as is the boot and shoe industry. The textile industry is debasing quality and that is an inevitable effect of the tax, but I do not think a case is made out specially so far as the textile trade is concerned. Can we really say, in the light of present sales, that the tax is having a very serious effect on the home trade? The percentage of goods actually sold


with tax is getting smaller and smaller. I do not know the current figures, but they must be very small indeed. Certainly, there is no sign of a breakdown in the industry. Indeed, we saw from a report of the Ministry of Labour yesterday that the labour force is growing in this industry. In the wool textile industry there is a demand for the product and labour which cannot be met.
Therefore, I do not think any special case can be made for the textile industry above that of other industries. The substantial recession which took place in the cotton textile industry has had benefits and positive results which we ought not to ignore. It brought about a slight redistribution of the labour force. If Lancashire is to be efficient, and to be driven to be efficient, I should not like to see a state of affairs in which there was an ad lib supply of labour or a frantic demand for labour. What we want is to get Lancashire to use more efficient methods. If we took the tax off I do not think it would be helpful in that way.
When last year we criticised the D levels, I think we were justified to a considerable measure, but the Committee ought to bear in mind that since that time the prices of raw materials of the textile industries, cotton and wool, have dropped substantially—[HON. MEMBERS: "No."] Many, such as Egyptian cotton, have dropped by as much as 20 per cent. and it is no good hon. Members saying that they have not. A D level of a year ago compared with today shows a marked difference. Moreover, through the recession in trade, margins have been cut. A D level of today shows at least plus 30 per cent. compared with the D level of 12 months ago.
Although, naturally, I am sympathetic towards the Lancashire textile industry, I hope the Committee will feel that this industry, with all our good will, cannot have a special case made for it. It is much better if my right hon. Friend is able each year to take progressive steps to reduce this tax so that, ultimately, he does away altogether with what is the worst tax on our industry.

Mr. J. Grimond: I am very glad to follow the hon. Member for Cheadle (Mr. Shepherd), because I agree with a great deal of what he said. In the strongest possible terms he expressed disapproval of the Purchase

Tax in all its forms. That is the main point which should be made in this debate. I suspect that there has been no slackening on either side of the Committee in our general objections to Purchase Tax, which have been stated often enough. It is an indirect tax which can distort industry and a tax which particularly hits high-quality goods on which the future of this country may to a great extent depend.
It is also an unfortunate fact that when the tax has been reduced, so far it has meant a large and quite unmerited loss to traders of all kinds. Although this matter will be debated later, I would point out that we cannot accept that nothing can be done to make good to traders the loss which at present they suffer when the tax is reduced.
The hon. Member for Cheadle was scrupulously fair about the textile industry, in which his constituency has a great interest. It is true that there are many other industries which suffer as severely from Purchase Tax as does the textile industry; but that does not in any way detract from the case that can genuinely be put forward for many branches of the textile industry. I am sure that the hon. Member for Cheadle will agree that it is vital to encourage textile production, and although he played a merited compliment to the Chancellor for having to some extent reduced Purchase Tax, we are nevertheless still under a handicap with the present rate of tax. Also the textile industry is very widespread; I doubt whether any other industry in Britain is so widespread. It is one of the great basic industries of the country.
4.30 p.m.
I should like to be assured that the steps taken this year to make some reduction in Purchase Tax are really a first instalment. There must be taxes to pay for the social services we want, but this is a bad tax. It was introduced as a temporary tax; it is hitting quality goods industries which are vital to this country. I do not feel that we can give the impression that we are content with the reductions so far made. If this is merely a first instalment, and if the Chancellor has good reason for going only so far this year, I hope that he will give us some assurance that if he is spared to present another Budget next year the good work will be continued.
I wish to refer briefly to stationery. A plea has been put forward for educational stationery, and I do not think I need go into that matter again. There is the difficulty of distinguishing between stationery for educational and for general purposes. I should like again to put in a word for some general reduction in the tax on stationery. I have some interest rather indirectly in this matter. It is true that paper prices have come down in various ways which may perhaps have to some extent reduced the price of books, school requisites etc., but nevertheless I think that the tax is open to criticism.
It cannot be said that it is desirable to limit the amount of paper used, except perhaps in Government Departments. It is really important for this country that its great tradition and standing in matters connected with books, etc., should be maintained, and it is a fact that the market has become more difficult. If the Chancellor could see his way to make some further reduction in the tax on stationery for educational and other purposes, it would be widely welcomed. I do not think it would cost much, and it would be of assistance to an important trade.
I wish to say a few words on behalf of consumers of the various articles on which Purchase Tax is charged. The manufacturers' view has been put forward in respect of textiles and stationery, and will, no doubt, be put forward in respect of other goods. The Chancellor's whole Budget, however, is founded on the belief that the general atmosphere, the temperature, of economic life has to some extent altered and that it may be necessary to give a slight fillip to consumption. That is one of the main thoughts behind his Budget.
In my view, a reduction of Purchase Tax is a very valuable way of giving such a fillip. We have moved away from the sort of conditions in which Purchase Tax was originally imposed, which was a time when consumption was liable greatly to outrun production. We are finding matters in the export market much more difficult and it may be necessary to stimulate, at all events to some slight extent, home consumption. I should like the Chancellor to bear in mind the point of view of the consumer.

Mr. Ralph Assheton: More than one hon. Member on the Opposition side of the Committee has referred to me, so I thought it appropriate to say a few words at this point. I think the whole Committee were glad when they heard the Chancellor's decision to make a general reduction in Purchase Tax. My hon. Friend the Member for Cheadle (Mr. Shepherd) put the case very clearly. He reminded us of the attitude which the present Chancellor is taking to Purchase Tax generally and compared it with the attitude taken to the tax by the late Sir Stafford Cripps and by other hon. Members opposite.

Mr. Joseph T. Price: In quite different circumstances.

Mr. Assheton: No doubt, but my hon. Friend compared the attitude.
We ought to remember that after the war a great many of us felt that Purchase Tax was one of those taxes that ought to be got rid of, but the Government which held power in this country for five years, and held office for another year, piled upon this country an enormous increase of expenditure which had to be sustained and met by some form of taxation; and the £300 million or thereabouts which the Chancellor raises through Purchase Tax is one of the prices which we have to pay for that enormous burden of expenditure, a great deal of which is no doubt of great benefit to the people of this country. It is impossible to have it both ways. If we want these advantages, we have to pay for them in one way or another.
There are many aspects of Purchase Tax which are particularly easy to criticise. The hon. Member for Southampton, Itchen (Mr. Morley) illustrated that in the case of stationery. I have more than once spoken in the House about the extraordinarily tiresome consequences of Purchase Tax on stationery. The hon. Member drew attention to its effect on local government expenditure. I have previously drawn attention to the absurd anomalies that inevitably arise in the imposition of this tax and I hope that one day we shall be able to get rid of it. We on this side of the Committee want to get rid of Purchase Tax—that is our ambition—or at all events bring it down to a very low level. We dislike it intensely.
I must remind the Committee that last year the Chancellor was able to reduce Purchase Tax on textiles, to which the hon. Member for Rossendale (Mr. Anthony Greenwood) referred, by a quarter. The justification for singling out the textile industry last year for this special treatment was the fact that the slump in that industry was very severe and was in full swing at that time. As a leading article in "The Times" put it, the case for a stimulant was manifest. I was one of those who did his best to impress upon the Chancellor of the Exchequer and the Government, with the assistance of the hon. Member for Rossendale and the hon. Lady the Member for Blackburn, East (Mrs. Castle), how important it was that we should seek a reduction of this tax in order to help the textile trade out of a great difficulty.
In addition to that, the Chancellor was able to make some arrangement about the placing of orders in Lancashire and he was able to provide in all about £37 million, which had an enormous effect on the course of the textile industry in Lancashire. I am happy to say that the very heavy unemployment which was present a year ago has now very largely disappeared; in fact, in some parts of Lancashire there is a scarcity of weavers.
None the less, I am one of those who believe that Purchase Tax is definitely harmful, particularly to the textile industry. Certainly it is my ambition to see it removed. The Committee will recognise that the case of the textile industry is different from that of other industries because the D Scheme, which was introduced last year, although it was certainly an improvement on the Utility Scheme which it succeeded, has unfortunately had a very bad effect on the quality of textile goods being produced and sold; there is no doubt about that. In the case of most goods the tax is the same whatever the quality; but that is not so in the case of textile goods because the tax depends upon the price and, therefore, upon the quality. That is not a satisfactory situation.
Some people foresaw the weaknesses of the D Scheme last year, and as time has gone on those weaknesses have become more apparent. It has been generally recognised by the whole of the industry that it is not a satisfactory method of raising the tax. There has been constant

pressure during the year to reduce quality so that prices can be kept under the D limit. Goods above the D limit are not very much bought for the home market. Wholesalers do not much like stocking them. It is well known that without a sound home market it is very difficult to establish a good export market. Before the D Scheme came into operation, 50 per cent. of our textile exports were above the D level. I believe that the figure now is only 15 per cent., which is just another way of saying that there has been a general debasement of fine cloths——

Mr. H. Rhodes: Mr. H. Rhodes (Ashton-under-Lyne) rose——

Mr. Assheton: Perhaps the hon. Member will follow me. I am sure he will be interested to speak in this debate later on, being a Member for a Lancashire constituency, but I would rather complete my speech if I may.
I appreciate that the Chancellor feels unable to deal with this problem this year. He has made considerable tax concessions. He made a great concession to the textile industry last year and he does not feel able to do more this year. But I think there is some risk attaching to that decision. In common with other Lancashire Members and representatives of textile constituencies, I have received most serious representations, both from employers and from the trade unions in the industry. I should feel I was lacking in my duty to this Committee and to my constituents in Lancashire if I did not pass on those representations to the Chancellor and put the case strongly to him.
I beg both the Chancellor and the President of the Board of Trade to give most serious thought to this question. Although it may not be possible now to make concessions, I hope they will keep the matter under constant review, because reductions in the Purchase Tax may be made on other occasions than at Budget time, as the Committee is well aware. If at any time the Chancellor feels that the circumstances warrant a special reduction, no doubt he will consider it. I repeat that we in Lancashire are grateful for what the Chancellor did last year. It helped us over a period of great difficulty. But although trade is better and unemployment much less, there is no great confidence in Lancashire today that this situation will


remain. There is serious anxiety about the future.
This matter of Purchase Tax illustrates once again our serious financial position. At every turn we find trade and Industry and the general well-being of the community hampered by excessive taxation. It is interesting to hear hon. Members opposite attacking this form of taxation, because it is largely as a result of their activities that such very heavy taxation has been imposed on the country. I am sure the Chancellor agrees that a further reduction in taxation can come about only by further economies in national expenditure.

4.45 p.m.

Mr. Coldrick: It is pleasant to find among hon. Members opposite so many who apparently believe in the complete abolition of the Purchase Tax. I had intended to speak on the second proposed Amendment which we are discussing, namely, to leave out "fifty," and to insert "forty-five," but I wish to draw attention to a number of things which do not come strictly within the definition of "fifty."
I believe that every argument adduced in favour of the textile industry could be advanced on behalf of quite a number of other trades in this country. I am a representative of the largest body of consumers in this country and we have consistently opposed Purchase Tax. I believe that that tax was conceived by a Tory Chancellor in a fit of aberration, and the Treasury have ever since been trying to find reasons why it should be retained.
I believe that the Purchase Tax is disastrous to trade. It may be difficult to calculate the course of supply and demand—though upon such a calculation the success of a business may very often depend—but that is child's play compared with trying to fathom the inscrutability of the Chancellor's mind regarding Purchase Tax. We are in the ridiculous position that even when the right hon. Gentleman grants a concession so many people possess stock on which they have paid tax that they are driven to a state of near bankruptcy by reason of it.
According to the Chancellor this is an incentive Budget. By that I believe the right hon. Gentleman meant a

Budget which would induce people to do the best they can for themselves and for the nation. In common parlance, that means working harder in order to get more money to buy better things. I submit that the Purchase Tax has the reverse effect. If a person obtains money by hard work and by disagreeable sacrifice he then discovers that he has to pay out a disproportionate amount in the form of Purchase Tax to obtain anything better for himself.
If we examine items covered by the 50 per cent. tax we see how insidiously this tax works. Take, for example, ladies' handbags. Travelling in the Tube one is inclined to think that a lady's handbag is a kind of miniature boudoir, judging from the number of things extracted from it. I am sure everyone would agree that ladies find their handbags indispensable, yet they have to pay 50 per cent. Purchase Tax on them.
An indication of how far removed is the Treasury from the ordinary conception of things is the 50 per cent. Purchase Tax on attaché cases. If it is imagined that people carry attaché cases about as an adornment one need only go to a railway terminus in the morning and see the thousands of people who are obliged to carry attaché cases. Unless we have a paper bag conception of how people should carry things we should press for the removal or reduction of the tax upon attaché cases.
We welcome the concessions granted by the Chancellor, but we believe that it would have been far more prudent had he made concessions upon things regarded as essential by the great mass of consumers rather than uniform concessions on a large number of things not enjoyed by many people. I suggest that it would be in the public interest as well as in the interest of trade if the tax was reduced, or better still, abolished, on the two articles I have mentioned.
It would seem anomalous, when we have a Conservative Government, with co-ordinating Ministers, that we should reach a situation where sanitary inspectors insist on a permanent supply of hot water in shops and yet Purchase Tax is imposed on water heaters. I think it advisable for the Chancellor either to reduce or to remove the tax on those things.
It is archaic to suggest that in these days a wireless set is a luxury. Ruskin said that a room without a book was like a body without a soul. One might also say that a person in a house without a radio is detached from the rest of the community. Yet a tax of 50 per cent. must be paid on a radio.
A number of articles on which there is a tax of 50 per cent. are used in most households. For that reason, from the point of view of the consumer, an overwhelming case can be made out for a reduction or removal of Purchase Tax upon these articles. I could understand that during a period of shortage of leather, and so on, Purchase Tax should be retained on some of the goods I have mentioned, such as attaché cases and leather bags. It was maintained to prevent the consumption of goods deemed essential for more vital purposes. But everyone will agree that there is today a relatively abundant supply of leather. Consequently, there is no reason for trying to justify Purchase Tax on goods of this nature.
My hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) argued that already in certain trades buyers are being told not to buy on a large scale but to act as if they were living from hand to mouth. One can take it for granted that any experienced business man would ensure that buyers were given similar instructions in a large number of trades. One recognises that with large-scale production one must have permanent and large-scale orders. Very few producers of bulky goods have the space in their factories to store their products, and neither have the wholesalers room in the warehouses.
Therefore, one can understand that during the next six months, or at least when we get near to Christmas and people begin to conjecture what the Chancellor will do next year, business men will insist that their buyers buy the smallest possible quantity of goods. Instead of having a free flow of orders to the factories we shall have orders in fits and starts. That will lead to a great deal of under-employment or unemployment in a number of industries.
For those reasons it would be advisable for the Treasury to examine the whole position to try to find a more sensible method of raising the money now

raised through this iniquitous form of taxation, and, failing that, to see whether it is possible to introduce some improvement which would give a greater measure of stability. The instability which is characteristic of Purchase Tax makes this one of the taxes which militates most against the successful functioning of business.
Apart from that, let us always remember that a good part of this yield in the form of taxation represents the unpaid labour of a large number of workers. If the Treasury itself had to keep the records now kept by the wholesalers and those in the retail trade there would be a hue and cry for economy in the administration of the service, but so long as we can make the trader do the work that absolves the Treasury of the responsibility and the tax yields a handsome sum.
I sincerely hope that the Chancellor will look into the matter and, if possible, remove the tax completely from some of the articles I have mentioned. If he cannot do that, I hope that at least he will effect a reduction.

Mr. F. A. Burden: I reiterate my unqualified hostility to Purchase Tax as a tax. I shall confine my remarks to the textile industry, in which I should like to declare an interest. I was most concerned at the statement made by my right hon. Friend the Member for Blackburn, West (Mr. Assheton) about the debasement in quality of textiles through the desire of manufacturers to get under the D level. I was particularly distressed because of the ultimate long-term effect that that must have upon our export trade.
Recently I have been constantly in association with large buyers from America and other overseas countries whose obvious intention it is to buy as much merchandise as they can from this country. Almost inevitably the direction of their purchases is toward high-quality merchandise. It is impossible for manufacturers to produce two ranges and to run their looms making one quality of merchandise for export and another—because of the incidence of taxation—for the home market. I ask the Chancellor to consider the long-term effect. Today there exists a greater opportunity for the expansion of high-grade textile exports as well as other exports to the North


American market than there has been for some considerable time.
This is all bound up with the question of Purchase Tax and the intention, or the apparent desire, of manufacturers to get under the D level. There is also the question of increasing competition from overseas manufacturers of low-grade textiles who will be able to undercut us in the export market—Japan, Germany and America itself.
The question of exports and the maintenance of high-grade production for the home market are inextricably bound together. I ask the Chancellor to pay special attention to this tendency to debase quality at home and to consider the effect which this must ultimately have upon our textile industry. If we lose some of our exports because of this debasement, ultimately there will be another recession.
If the Chancellor is unable to reduce the tax on textiles now, I hope that he will realise that there is a great opportunity for high-grade clothing exports such as has never before existed. Certain of our high-class model houses have, as a result of the Coronation, received world-wide praise which gives rise to the possibility of exports where that possibility did not exist previously. If the trade is to get the full benefit of the ability to design clothes which appeal, then they must have the high-grade materials to enable them to do their best. Therefore, I ask the Chancellor to give most serious attention to the opportunities which exist and the difficulties which will result if this debasement of textiles is continued any further.

5.0 p.m.

Mr. Ernest Thornton: I am sorry that the Chancellor of the Exchequer has had to leave the Committee, because, in passing, I wanted to make reference to part of his speech in the Second Reading debate. I refer to column 720 of the OFFICIAL REPORT for 7th May, in which the Chancellor is reported as saying:
…it was due to the action of this Government that the textile depression was saved and that over 100,000 people were restored to employment by the latter part of this last year."—[OFFICIAL REPORT, 7th May, 1953; Vol. 515, c. 720.]

In relation to the cotton textile industry, this is more than a slight overstatement, and its sole justification, apparently, was the reduction of the Purchase Tax which was then made and the Government orders which were then placed. The Purchase Tax concessions then made were a quarter of the amount of the Purchase Tax itself, and those concessions were made reluctantly and under pressure, and only after influential representations had been made to the Chancellor by all sections of the industry. The placing of Government orders at that time was welcome and appreciated, but let me put the matter in correct perspective.
The cotton and rayon share of these Government orders was about £10 million. At six yards to the £ sterling, that is 60 million yards, which sounds a lot, but, in fact, in November, 1951, a month after the Government came into office, the average weekly production of the cotton textile industry, including rayon production, in Lancashire was 62·8 million yards. Therefore, the amount of the Government orders was approximately one week's production of the industry as a whole, or 2 per cent. of a year's production, or, in other words, about one-tenth of the fall in output last year. I say that to put the matter into correct perspective.
Later in his speech, the Chancellor also said:
.… we inherited, in the textile industry and elsewhere, a situation of declining production which, largely by our own efforts, aided by the more sensible members of the committee, we were able to restore."—[OFFICIAL REPORT, 7th May, 1953; Vol. 515, c. 720.]
This is certainly not correct in relation to the cotton and rayon textile industry, because the October-December quarter of 1951 showed the second highest quarterly production in the post-war period, and, in December, 1951, it was well known that the expert opinion of the Cotton Board's statistical staff, which opinion is respected in the textile industry throughout the world, was that, while we were in for a recession, that recession was not going to be wide and would not go deep. Further, in 1951, the movement of Tatter-sail's textile share index number showed very little difference from what happened in 1947–48 and 1948–49, but, instead of the expected recession, we had a great


slump, which went wider and far deeper than authoritative opinion expected.
Many people have been wise after the event. I am not suggesting that the Chancellor is one of these, because I have a respect for his judgment and ability. We have, of course, those people who, by forecasting a slump every year, hoped to be right sooner or later, and I think the "Economist" comes into that category. My explanation, for what it is worth, is that the Government's financial and budgetary policy contributed to this anticipated recession becoming a slump, because it had the effect of forcing up food prices and making money scarce for marginal purchases such as textiles largely constitute.
Anyhow, if the Chancellor's statement is logical and correct. I would submit that, if the Government's action at that time in reducing the Purchase Tax by a quarter and placing £10 or £15 million worth of Government orders, resulted in putting back 100,000 workers into employment, then, if the Chancellor had taken notice of our representations made at that time, and abolished the tax completely and placed a few more millions of pounds worth of Government orders he could have avoided the slump altogether.
It has been observed by the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton) that there is widespread apprehension in Lancashire today. I agree completely with the right hon. Gentleman, and I have spent the whole of my life in close association with our textile industries. This apprehension, I believe, arises mainly from two factors. First, the opinions that are expressed from influential sources that cotton manufacture must give way to the production of goods that have an expanding world market; and, secondly, Government reluctance to move when crisis threatens or is upon us. The Government gave way last year only sluggishly and reluctantly and after pressure. They gave way in a half-hearted manner, or perhaps I should say a quarter-hearted manner, seeing that the reduction of the Purchase Tax was a quarter.
The Purchase Tax and the D Scheme are causing loss and damage to the export trade in cotton and other non-wool textiles, and I remind the Committee that,

even as recently as 1951, cotton goods alone constituted the third largest group of United Kingdom exports, totalling £209 million, or, by value, 8 per cent. of the total of United Kingdom exports. Indeed, that was not an exceptional year, because for the three years 1949-51, the cotton textile industry's share of the export trade averaged 8 per cent. for those three years. This amount of £209 million for 1951 was exceeded only by the group described as "vehicles" which is a very large group including locomotives, ships and aircraft, and the group described as "machinery and parts." All sections of the non-wool textile industries are profoundly disturbed by the Chancellor's refusal to take any remedial action.
I wish to refer to the statement issued by the 17 trade organisations. It is a very powerful case, as I believe any hon. Member who has read the document will admit. I think the case cannot be refuted if the Government really believe that the cotton textile industry is to remain an important part of the national economy. In considering this statement, with which the trade unions were fully associated, in the summer of last year, it was decided that these representations should be made privately to the Chancellor so that the matter would not become a case for political controversy and apprehension and uncertainty should not be aroused among buyers. The trade unions, who loyally observed the undertaking of the committee of the 17 trade organisations, feel that their restraint has been rather shabbily rewarded.
It is my opinion that the short-term prospects for the cotton textile industry are not good. As has been said, the pattern of production has been seriously disturbed, and though the recent trend of exports show a slightly upward movement, which I believe may continue throughout the rest of this year, the real danger to exports arising out of this distortion of the pattern of production will, I believe, come next year and perhaps the year after. Therein lies the danger of what we are now doing.
If we have a fall in cotton prices later in the year, as is not improbable, we may have another serious recession in the cotton textile industry before the year is out, and that is one of the reasons why in my opinion the cotton textile industry, and the rayon manufacturing industry


associated with it, require special consideration such as was given last year. I may be accused of pessimism in this matter, but I am attempting to be realistic and objective.
Perhaps I may be pardoned for saying that last year, when pessimism was rife both inside and outside this House regarding the future of the cotton textile industry, I expressed the guess in speeches which I made throughout Lancashire at that time that by the end of last year or early this year production in the industry would be back to about 90 per cent. of the average production for 1951. That figure, expressed in weight of yarn, was attained in February of this year, and at the present time is running at about 93 per cent. of the average of production for the peak post-war year of 1951. I say that merely to indicate that there may, perhaps, be some realism in my apprehensions today.
Prior to the last war, and for nearly 100 years before that, the home trade was comparatively a mere adjunct to the export trade in cotton textiles; it was a mere by-product of the great quantities and varieties of goods which we exported to the markets of the world. The position now, of course, is reversed. The extent of the contraction in the size of the cotton textile industry at present is not sufficiently realised. In my judgment, its present size is about right, provided the right policies are pursued and the right decisions are taken. As a result of this contraction, the home market has for the first time become the main market, and on it must be based the qualities and the varieties.
If the export trade is to survive as an important element in our national economy, these qualities must be improved and widened, and not contracted as is happening at the present time. In other words, our unsurpassed designers, technicians and scientists must be given full scope instead of being cramped as is the case at the moment. Indigenous cotton industries are springing up and have sprung up in all parts of the world, and are providing the medium and low grade cloths to meet their national requirements.
In my opinion, the future of this great industry rests more than ever before on our

producing new type yarns, novel fabrics and higher grade qualities. But, unfortunately, all these come above the D line, and the home market for them is being slowly strangled. Below the D line, as is well known, there is no tax at all. In consequence, we have this debasement of quality to get below the D line, upon which I do not intend to enlarge because so much has already been said about it.
5.15 p.m.
The distortion of the pattern of production is not only damaging the industry's reputation, but is tending to lower productivity. Reference was made by the hon. Member for Cheadle (Mr. Shepherd) to the need for increasing productivity and efficiency. We shall not get increased productivity or increased efficiency during a period when qualities are being debased. Technically, everything is against that being achieved.
A well-known textile producer stated recently—and it is well worth repeating—that:
At the present time the wrong cloths are being made for the home market and the right cloths are not being made for export.
Like all generalisations, that is probably an over-statement, but, in my opinion, there is a lot of truth in that observation.
A year ago, as the right hon. Member for Blackburn, West indicated, 50 per cent. of the cotton cloth produced was above the D line whereas now only 15 per cent. is above the D line. This is partially explained by the fall in the price of raw cotton and producers margins, but by no means all of it is explained in that way, as I shall attempt to demonstrate. For example, the price of rayon has remained stable throughout the whole of that period whereas the price of raw cotton has fallen.
A year ago, 81 per cent. of the rayon cloths produced were above the D line compared with only 34 per cent. at the present time. Those two factors taken together demonstrate that debasement of quality is substantially responsible for the fall in the production of goods of high quality, i.e., those above the D line. In the long-term, our exports will be jeopardised because exports of cotton textiles lost to us now can never be regained.
The Buxton International Cotton Conference, which I attended as one of the


representatives of the British cotton textile industry, proved, I think, fairly conclusively, that world productive capacity was in excess of effective world demand. In 1947 and 1948, we could afford to lose exports because we could regain those markets in 1949, 1950 and 1951 owing to the fact that expanding world production of textiles had not at that time caught up with the demand for those goods. But it is now quite a different story. In their search for world trade, the textile industries of Britain are faced with a handicap imposed by this House, a self-imposed handicap with which no other country has to contend.
I mentioned that we were faced with a serious decline in exports. One of the main causes, I repeat, is distortion of quality production brought about by the D Scheme and by Purchase Tax. The Dutch have recently removed their luxury tax on textiles primarily for export purposes. No other country in the world at present imposes these fetters on its textile industries. We claim that our industry should be put on the same basis as our overseas competitors and, even more important, on the same basis as some of the other main exporting industries of the United Kingdom, such as machinery and shipbuilding. The diversity of the products of the Lancashire cotton textile industry is infinitely greater than that of the relatively standardised production of, for example, motor vehicles. A far better case can be made out for discrimination in industry than for discrimination in sport.
All other countries who export textiles act on the principle that a strong and unfettered home market comes first. If there were any doubt about it the experience of 1951 proved that textiles are marginal purchases. If Purchase Tax is reduced on a wide range of goods and not on textiles there is a great danger of a switch in consumer purchases resulting from the Budget concessions, and it could lead to a further recession before this year is out.
I should like to make reference to some of the special factors which should lead to special consideration being given to this industry, such as its top-heavy age structure, which is similar to that experienced in the coal mining industry at the end of the war and between the

two wars, and to the effect on juvenile recruitment. There is little hope of raising productivity so long as this tax is retained.
I might summarise my arguments as follows: The Government's refusal last year to remove Purchase Tax, coupled with their financial and budgetary policy, turned a recession into a slump. I ask the Chancellor very seriously today whether he is going to make the same mistake again. I again, very respectfully, thrown out a warning.
Secondly, it would appear that the Government have written off the cotton industry as an important part of the national economy. If this is correct, it is a great mistake in the national interest, let alone in the interest of the County Palatine of Lancaster. Thirdly, Purchase Tax and the D Scheme are doing irreparable damage to our export trade. Exports lost now cannot be recovered in the textile trade of the world. Fourthly, the forcing of quality debasement is damaging the reputation of the industry and will lower and not raise productivity. The present uncertainty and apprehension are robbing the industry of its younger male labour. This is of vital importance in an industry which has already a top-heavy age structure in its labour force.
Finally—and I am sorry to have taken so long, but I have been associated all my life with this great industry and I feel very keenly about it—I seriously appeal to the Chancellor of the Exchequer to make some gesture even at this late hour which will help to restore hope to a great industry which has known many vicissitudes but which is, and can continue to be, an important element in our national economy.

Air Commodore A. V. Harvey: The hon. Member for Farnworth (Mr. Thornton) has made—I think the whole Committee will agree—a very thoughtful speech on this tricky problem, about which he is very knowledgeable. I thought he was less than fair in his comments on the steps taken by the President of the Board of Trade and the Chancellor of the Exchequer last year. He referred to the large orders which were placed for over 60 million yards of textiles and said that it only amounted to about a week's work. While that may be true, the hon. Gentleman did not say that the orders were placed where work was most


needed, in the areas vitally affected by the recession.

Mr. Thornton: I only made that remark in relation to the Chancellor's expression that as the result of his Purchase Tax concession 100,000 people had been put back into employment.

Air Commodore Harvey: Obviously, the concession had a tremendous effect in the affected areas. The hon. Gentleman said that the Government budgetary policy had brought about the recession. I do not think he was in the House at the time, but in my constituency the recession started before the Election in the autumn of 1951. A great topic of conversation in Macclesfield was unemployment, and so on.
It is well known that salesmen going to North America from the textile industry of Britain were failing to get orders, as they had done in the previous year. That was in the summer of 1951 and was before the Budget concession. Conditions were the same all over the world. Every country was affected by the recession. It is very difficult to give reasons except to say that far too much had been produced of the wrong quality and that up-to-date methods had not been brought into effect.
I was not going to refer to the remarks made by the hon. Member who spoke before the hon. Member for Farnworth, because I have an interest in the electronics trade myself, but I would say to the Chancellor that in considering radio sets for the home he should bear in mind that they are as much a part of the equipment of the home as a carpet sweeper. To charge the public Purchase Tax on replacement valves for radio sets is wrong when they can buy replacement tyres for motor cars free of Purchase Tax. I would ask my right hon. Friend to look into this anomaly, which affects millions of people.
I would now continue my own remarks about the textile trade. This matter vitally affects my own constituency where something like 80 per cent. of the people are employed in that great industry. The Chancellor has done a tremendous lot for the textile trade as a whole. The mere fact that he gave way reluctantly does not mean anything at all. I am happy that we have a Chancellor with such a flexible outlook that when industry and the House of Commons bring

pressure to bear he can see reason and is prepared to climb down. I only wish that some of the Chancellors in previous Governments had acted in the same way. The country would be much better off if that had happened.
Conditions in the industry have improved out of all knowledge in the last 12 months. There is very considerably less unemployment in my constituency. The number is about the same as they were at the Election in October, 1951, under 200. The difficulty is to get good labour. Labour is drifting into other industries because of the uncertainties of the textile trade, and particularly into light engineering.
I would stress the point made by my right hon. Friend the Member for Blackburn, West (Mr. Assheton) about quality goods. Britain has lived for 100 years by making quality goods. If we are going in for making cheapjack goods, whether in textiles or in engineering, we shall have a lower standard of living. Britain has to import a large part of its production in exchange for food, and all our raw materials have to make high quality goods. It is useless our trying to compete with Central European countries and others in producing cheap goods. We want the highest quality goods at the lowest possible price for export and that can be achieved only by having a healthy home market.
In the textile trade, the home market has to support the export side of the business. Trade is seasonal in some countries, like Australia, which imports for three months of the year, and North America. Patterns have to be tried out on the home market to see whether the British public like them or not. If they do, we know we have good export quality fabric.
5.30 p.m.
One cannot do that when one has this pernicious tax. But when hon. Gentlemen opposite talk about what the Conservative Government are doing they should be asked to read the speech made during the war by the Leader of the Opposition when the Purchase Tax was introduced. The right hon. Gentleman said quite clearly that he hoped it would not last a day longer than the duration of the war, but he used it for six years afterwards. That is the old story. Once a tax is imposed it is most difficult to get rid of it. Nevertheless, the Chancellor of the


Exchequer is facing this problem. It is clear that he is gradually reducing all taxes. That is Conservative policy. By getting rid of controls and pernicious taxes we shall trade successfully. We shall not trade successfully if we do not do that.
Seventeen different organisations in the non-wool textile industry have protested to the Chancellor about Purchase Tax. These bodies are not irresponsible. Their members have spent mtany years in the industry. They have not been managing directors all the time but they have worked their way right through the business and have achieved high executive positions. Their opinion counts and I ask the Chancellor to take note of it.
The Barracks Printing Mill, in Macclesfield, are doing a fine export trade, but when there is a tax of 6s. a yard and it takes six or seven yards to make a lady's dress it puts £2 on quite a cheap dress before the wholesaler and retailer add their costs. It is obvious that the public cannot afford those prices, with the present high rents and the cost of living, but we have to encourage this home market and that can only be done by reducing the tax.
It has been made clear to the Committee today that quality goods are decreasing. That is clearly because most manufacturers can see that they can sell goods better if they produce goods below the D line. I agree with the hon. Member for Farnworth when he says that we may not have a recession this year, but that it may take place next year or the year after. No doubt the Chancellor will tell us in due course that he finds it very difficult to reduce taxation at the present moment. If he says that, I hope that he will give an undertaking to the Committee that he will watch the situation week by week and that if by the autumn months, or even before that, there is deterioration he will take drastic action to reduce the tax.
This country is up against many problems in trade. The French have placed new import barriers on textiles, and tariffs have been increased in America. Yet we have given open licences to increase the quantity of fabrics which can come into Britain from France, Switzerland and Italy to compete against our high quality goods. Up to a point that is right. We want freer trade and we

want to get money circulating in Europe, for that will help us in the long run. But the cost of production has gone up since last year, and if prices are continually rising we shall find it very difficult to compete with our continental friends and with the Americans.
One instance of anomalies in the textile trade concerns handkerchiefs. A handkerchief with coloured borders is subject to tax, but a plain white handkerchief falls below the tax level. It seems quite wrong that a handkerchief should be subject to tax because it has a coloured border. The textile trade is not a very glamorous trade compared with some of our engineering trades, but it is one of the most important. Craftsmanship in the industry has been passed on from family to family for generations and we must retain that craftsmanship.
I hope that the Chancellor will give this whole matter constant consideration in the coming months to ensure that we do not go back to the position which we were in 18 months ago.

Mr. F. Blackburn: I shall confine my remarks to textiles. Like other speakers on that side of the Committee the hon. and gallant Member for Macclesfield (Air Commodore Harvey) seemed to be in difficulty as to whether he should make his main theme the defence of the Chancellor or a plea on behalf of the textile industry. In fact, the right hon. Gentleman the Member for Blackburn, West (Mr. Assheton) added a third aspect to his speech. That was a sort of nostalgia for 19th century finance and economics. But it appears that all hon. and right hon. Members opposite were hoping that the Chancellor would do something for the textile industry, in spite of the fact that the hon. Member for Cheadle (Mr. Shepherd) tried to argue that no special case could be made out for it. I shall try to argue that a special case can be made out.
The two Amendments which we are considering do not go nearly far enough. The position is such that we need a much more drastic reduction in the Purchase Tax on textiles. There are two ways of approaching a problem of this kind. We can say, "Let us not ask too much and perhaps the Chancellor of the Exchequer will be able to grant it." But I should


prefer to have the other approach, the Browning approach,
…a man's reach should exceed his grasp, Or what's heaven for?
I have been surprised by remarks made from hon. Members opposite and particularly surprised during the debate on the Budget, when it was suggested that after all the Chancellor had done something for the textile industry last year and the industry cannot expect anything to be done this year. That is certainly not my opinion, and it is not the opinion of responsible people in the textile industry. The hon. and gallant Member for Macclesfield referred to the publication compiled by representatives of 17 leading organisations in the non-wool textile industry. From that publication I should like to quote to the Committee the beginning of a letter which was sent to the Chancellor on 15th April this year by Sir Raymond Streat. He said:
"DEAR MR. CHANCELLOR,
At a meeting held today under my chairmanship of representatives of the leading organisations in the non-wool textile industries"—
that is, the 17 organisations to which I have referred—
consideration was given to the proposals concerning Purchase Tax revealed in your Budget statement. Having regard to the detailed representations made to you last October which brought out the grievous injury inflicted by Purchase Tax and the D Scheme upon our trade activities bitter disappointment was expressed at your failure to take any remedial action.
I stress, therefore, that the point of view which I am putting forward is the point of view of responsible leaders in the industry, both industrialists and trade unionists.
What I have to say on these two Amendments in no way argues against any concession made to any other industry. I am delighted that the Chancellor has been able to make certain concessions. I take it that there are two reasons for them. The first is to help the industry and to help workers in the industry. The second is to help the consumers. I should like to consider both from the point of view of the textile industry, taking the second reason first—that is helping the consumers.
I say definitely that if the Chancellor had wanted to reduce the cost of living and to make the greatest contribution to

the poorest section of the community a reduction of Purchase Tax on textiles would have been of far more value than the reduction of Purchase Tax upon any other commodity. According to the "Economic Survey, 1952" the purchase of clothing was down by 3 per cent. and the purchase of household goods down by 8 per cent. That is a clear indication of the help that is needed in the industry.
The first reason for the concessions was to help industry and the workers in the industry. We have got to ask whether the industry needs help at the present time. When one thinks of this great industry and the contribution that it has made to the welfare of this country and of the treatment that has been meted out to the workers in this industry over the years, it is sometimes difficult to keep the bitterness out of one's soul.
It has been said that in the last year the Chancellor did a number of things for the textile industry, and it is claimed as a result that there has been an improvement in the industry. What exactly did the Government do last year? Admittedly, they placed certain orders in advance of requirements for the rearmament programme. I think my hon. Friend the Member for Farnworth (Mr. Thornton) in his valuable speech indicated the extent of those orders. But we are grateful for what was done.
Then the right hon. Gentleman reduced Purchase Tax from 33⅓ per cent. to 25 per cent. But the greater part of the value of that was lost because the D level was put far below the old utility level. Then the Government have scheduled North-East Lancashire as a Development Area. That, of course, can only have an effect over a long term. I hope that it does have some effect in that part of Lancashire, but it certainly will be of no advantage to the textile workers in my own constituency in Stalybridge and Hyde, in North Cheshire.
Have the Government really set about helping the industry in the export market? For 18 months we have had this problem of the balances in Brazil, and we are hoping soon that the formal talks to which the Government have referred will take place. We lost £100,000 worth of textile orders in Bolivia because the Government were not prepared to deal on a barter basis. As a result of our failure


to have any barter dealings with Bolivia, another country stepped in and got the order.
I am hoping that in time the Government will be able to do something about the great time lag between applications and allocations of shipping space for shipment from this country to East Africa compared with the time taken in shipment from the Continent. The Government could have done a great deal to help the textile and other industries in the export market. When we are discussing what the Government have done, let us be thankful for the small amount they have done, but let us realise that there is still a great need for Government help for this great industry. I am firmly convinced that this industry needs and deserves help.
Let us consider the industry from certain aspects—first of all, the number employed in the industry. At present there are 54,000 fewer people employed in the textile industry than there were two years ago. Does that not indicate that this industry still needs some help? As to unemployed, though there has been a great improvement, there are 15,800 more unemployed than there were two years ago, and if we take together the number of unemployed and the reduction in the numbers employed in the industry, we get a figure of nearly 70,000. Surely, that is an indication that the industry still needs some help.
Consider the matter from the point of view of production. Take cotton yarn, for example. In March of this year the weekly average production of cotton yarn was 4.32 million lb. less than it was in November, 1951. Take woven cloth. In February the weekly average for cotton was 12.4 million linear yards fewer than in November, 1951, and for rayon mixtures 1.3 million linear yards fewer than in November, 1951. Do those figures not indicate that the industry still needs help? From the point of view of raw cotton consumption, in February the weekly average was 2,810 tons less than it was in November, 1951. In February the weekly average of looms running was 60,000 fewer than in November, 1951.
5.45 p.m.
I am quoting these figures because it has been stated that the textile industry cannot make out a special case for help.

The figures that I have quoted are quite clear evidence that the industry does need all the help it can get at the present time. Our exports in March of this year were £23½ million less than they were two years ago. Obviously the industry needs help.
I want now to refer to what has already been mentioned several times—the effect that the D scheme and Purchase Tax have had upon our standards. It is quite clear that they are having a detrimental effect upon our exports and they are placing us at a disadvantage vis à vis our competitors. That is not my view alone; it is the view of the experts who are concerned in the industry. I should like to refer to two short quotations from the report to which I have already referred. My first quotation is this:
No careful investigator of the present position of the textile industries can escape the conclusion that a purchase tax on their products is a bad tax and should be removed. Removal is called for primarily to place price structure and incentives on a free, economic basis and so enable this country to hold its place in the world's textile trade, and more especially to give the great Dominion markets a service in quality, price and delivery which will justify continuance of the preferences which are now enjoyed. The textile depression is world-wide and no other Government is penalising its industry and checking its recovery by a tax so serious in its effects.
The other quotation is this:
It has often been urged in recent years that Britain's future lies in the production of goods of good quality and design. Our foreign competitors, notably West Germany, France and Italy, fat from discouraging the production of high-quality materials give velvets and suchlike cloths every encouragement and actually subsidise exports. In Britain, the effect of Purchase Tax is to impose a depressing burden on the better end of the trade. Those responsible for fiscal policy must realise that they are adding burdens of a most crippling character when they institute the D line running across the middle ranges, and on the better types a high Purchase Tax.
It is quite clear from the evidence submitted by those 17 organisations who are members of the committee that at the present time the D Scheme and Purchase Tax are having a detrimental effect upon standards. In view of that and the figures that I have already quoted it is important that this Government should make a gesture and should do something further to help this great industry. May I appeal to the Chancellor, who I am glad to see is now back with us, not to look back on 1952 and think, "That was the year


when I saved the textile industry" but to look back on 1952 and say, "That was the year in which I did a little for the textile industry and I shall continue the good work in 1953."
I am sure that if this question were left to a free vote the Chancellor would be on the losing side, but he has loyalty behind him on this matter. I ask him not to strain the loyalty of his colleagues too far, but to allow them to think that they, too, have been able to raise their voices on behalf of this great industry and to persuade the Chancellor to do something further for it.

Mr. Charles Fletcher-Cooke: When the hon. Member spoke in the Budget debate, I remember very well his saying that the textile industry was now set up with a fair wind—or words to that effect. I quoted his words myself the next day.

Mr. Blackburn: When the hon. Member quotes me I wish he would quote the exact words I use. I am quite certain that I never used any phrase about a fair wind. I think I said that there had been an improvement in the textile industry. I have not argued today about an improvement in the industry over the very bad period of May, 1952. I admit there has been an improvement; the figures I have been quoting have been to show that the improvement is not complete.

Mr. Fletcher-Cooke: I am not suggesting that the hon. Gentleman said that the improvement was not complete. All I say is that he admitted, very fairly and frankly, that there had been a considerable improvement. Whether or not he used the words "a fair wind" I do not know, and I would not argue.
At any rate, when the Chancellor framed his Budget this year, as opposed to last year, and had to see what industries, trades and activities he had to help as a matter of urgency, it was quite clear to him that there were industries which were very gravely threatened with an immediate withdrawal of purchasing power either at home or abroad, and that the textile industry, temporarily, at any rate, was not so threatened.
His prognosis has proved to be quite correct, because since he introduced his Budget the textile figures have got better.

and they are getting better week by week. How long that will last we do not know, but the Chancellor has to find a vast sum of money and he is not able to look very far ahead. If he makes a concession all round, to those whose needs are not so urgent as well as to those whose needs are urgent—such as the motor car industry at the time of the Budget—he will not get that money.
Very little has been said by hon. Members opposite with which my hon. Friends disagree. I was particularly interested to hear from the benches opposite—perhaps for the first time—the great concern for the production and sale of luxury textiles, such as velvets. They were mentioned by the hon. Member for Rossendale (Mr. Anthony Greenwood) and by the hon. Member for Stalybridge and Hyde. In some of the projected programmes of the Labour Party there are suggestions that Purchase Tax is to be removed and that there is to be substituted something called a luxury tax. [HON. MEMBERS: "Hear, hear."] I am glad to hear that confirmed by hon. Members opposite sitting below the Gangway.
I want to ask whoever will be speaking from the Opposition Front Bench whether that is the policy of the Labour Party. Must we wait another week before we know? If it is the policy of the Labour Party to substitute for Purchase Tax a luxury tax, how does that fit in with the desire to relieve velvets—which are presumably a luxury, if anything is—of the effect of Purchase Tax? That is a straight question which I put to hon. Members opposite. I should like to know whether hon. Members opposite—if ever the country has the misfortune to have them back on these benches—intend to produce something called a luxury tax, which will presumably put the whole weight of taxation on luxuries and take it off everything else. No doubt there are ethical arguments for doing so, but it will undoubtedly cripple the export trade which they are so keen to support today.

Mr. Sydney Silverman: The hon. Gentleman will not have overlooked the fact that all Governments, at all times—including the present Government—have had different rates of Purchase Tax and have graded those


rates according to the utility or non-utility, semi-luxury or luxury character of the article concerned. What is he complaining about?

Mr. Fletcher-Cooke: I am complaining that it is apparently to be the policy of the party opposite, when they return to power, to increase that differential even more than it is today. In reducing this tax it has been our policy as far as possible to iron out the great difference between the weight of taxation upon quality goods and that upon other goods. That policy was followed in the last Budget and in this one, but I gather that the proposal, as mooted in the Press—and we do not know how official it is—is to increase that differential more than it ever was before by imposing a luxury tax and removing Purchase Tax altogether. I should like to know whether that is the policy of the party opposite.

Mrs. Barbara Castle: We have had some very remarkable speeches from hon. Members opposite, particularly on this textile point. Their tone, temper and spirit have been in marked contrast to the display we had from them last year. At that time they made a great show of the tremendous fight which they were putting up for Lancashire. We all waited with bated breath for this great revolt to materialise in some dramatic climax. In the event, the Chancellor made a very small concession, and the fuss died down, but even at that time many hon. Members who accepted that small concession did so in the firm belief that it would be merely a first instalment, and that a wider concession would be made this year. The hon. Member for Oldham, East (Mr. Horobin) stated quite definitely, when the Chancellor agreed to reduce Purchase Tax on textiles to 25 per cent.:
Next year I hope it will come down to 20 or 15 per cent. …"—[OFFICIAL REPORT, 12th May, 1952; Vol. 500, c. 994.]
It was on that tone of hopeful anticipation that the fight was called off.
This year, to the shock and horror of Lancashire, nothing whatsoever has been done for textiles. Hon. Members opposite, instead of again taking up the fight, have told us in varying tones of complacency that there is really nothing to worry about. The hon. Member for Cheadle (Mr. Shepherd) actually told the Committee

that Purchase Tax on textiles and the D Scheme are not affecting our export trade in any way.

Mr. Shepherd: The hon. Lady should listen to and remember what I said, which was that the chief obstacle to our export trade at the moment was the question of import restrictions.

Mrs. Castle: I agree the hon. Member went on to say that, and I was going to mention it, because I took a very careful note of what he said. I do not want to misquote him, but he did say that it was wrong to imagine that the D Scheme and Purchase Tax formed the main problem. He said that the problem was the question of import restrictions.
The tone of his speech was in very marked contrast to the masterly survey we had from the hon. Member for Farnworth (Mr. Thornton). We always listen interestedly to what the right hon. Member for Blackburn, West (Mr. Assheton) has to say on these occasions. I listened with great care to his speech, but in the end I was left in rather more than my usual confusion of thought about what he meant. It is always a little difficult to follow his argument. His words come very smoothly, but at the end one asks oneself, "What is he advocating and what, if anything, is he fighting for?"
6.0 p.m.
This afternoon the right hon. Gentleman began by assuring us that he welcomed the principle of an overall reduction in Purchase Tax rates. Then he went on to tell us, once again indicating the complacency of hon. Members opposite, that this year there was not the same need to give stimulus to our textile trade as there was last year. Then he went on to speak of the very grave damage which is being done to exports and to home trade in textiles by the D Scheme. Finally, he said that he perfectly well understood if the Chancellor did not feel that he could make any concessions.
Last year, the right hon. Gentleman began the Finance Bill debates with a demand for the root and branch abolition of Purchase Tax on textiles and gave the impression that he would go down with the ship rather than abandon those colours. At the end of somewhat protracted debates on the matter, however,


he told us, on 13th May last year, that the Chancellor
has given us only a quarter of what we asked for, but we are grateful to him."—[OFFICIAL REPORT, 13th May, 1952; Vol. 500, c. 1122.]
This year the Chancellor has given him nothing at all and he is still grateful. This is a real phenomenon of character which is worthy of a Dickens' pen. If "Barkis is always willin'," the right hon. Member for Blackburn, West is always grateful.
I suggest to the right hon. Gentleman that when he ends his speech by telling us that we must have huge cuts in Government expenditure to enable tax reductions to be made he is dodging the issue. What are the principles which are guiding the Chancellor of the Exchequer in the Purchase Tax proposals he is making in the Budget? It is perfectly easy for the Chancellor so to direct his reductions that certain industries or certain sections of the community or certain income groups can benefit as a result of deliberate Government policy, but the Chancellor has not adopted that method of selection.
These Purchase Tax cuts which we are offered this afternoon prove that the Chancellor has abandoned the attempt to use the Budget to plan our national economy and has gone back on the practice of previous Labour Chancellors, who have always regarded the Budget as an instrument of national planning. The Chancellor does not believe in national planning and we cannot, therefore, be surprised if some of the consequences of the financial measures which he has chosen are remarkable. Nor can we be surprised if by this refusal to use the Budget as an instrument of planning, the Chancellor throws away the chance to help the textile industry, and does it quite deliberately.
It was always the policy of Labour Chancellors, when they came to look at this admittedly very difficult question of Purchase Tax, to try to influence the direction of our production or our export trade or our home consumption. All hon. Members can make out very good cases for the reduction of Purchase Tax on this item or that item. We can all make nice, demagogic speeches—and some very demagogic speeches were made by hon. Members opposite, when they were on the Opposition benches, every

time the Finance Bill was introduced. There were great demands for cuts in the Purchase Tax, about which they are now remarkably mute.
Labour Chancellors used Purchase Tax deliberately to try to influence the direction of our production or our export trade or our home consumption. I recall that in 1951 the Chancellor of the Exchequer had the political courage quite deliberately to increase Purchase Tax on items such as refrigerators, washing machines, radios and television sets. He wanted to restrict home consumption of these items in order that we might, on the one hand, help the defence programme production and, on the other hand, guide such engineering products into the export market.
At the same time, the same Chancellor of the Exchequer, desiring to lighten the burden on the housewife of Purchase Tax on essential items, went down the list of goods carrying Purchase Tax and looked at the list from the point of view of the ordinary home. He said, "Where I can truly say that Purchase Tax is being levied on essentials which every family must have, I will wipe out that Purchase Tax." He gave us a long list of exemptions from Purchase Tax on domestic, homely articles, which had been quoted with such effect by some hon. Members—such as pastry boards, rolling pins and dusters. We often had dusters waved at us by hon. Members opposite as a symbol of the iniquity of Purchase Tax, as though it were the Purchase Tax on dusters which they cared about when really it was the Purchase Tax on motor cars and fur coats.
The Chancellor of the Exchequer at that time took the duster out of the arena of politics by taking Purchase Tax off it altogether. He gave us a Budget which, on the one hand, sought to help the export trade and the defence programme by increasing Purchase Tax on certain items, and, on the other hand, wiped out Purchase Tax completely on a highly selective list of essential items.
In this Budget the Chancellor of the Exchequer has utterly abandoned the policy of selection. He has taken the easy way out. But, as a result, this House is refusing to itself the powers to direct the national economy in such a way as to help industries which are


suffering from imminent depression and an export problem or to help certain sections of the community. The Chancellor has given us a Budget containing concessions of £117 million in Income Tax, which he admitted to the House could not benefit those sections of the community which are worst off because those sections of the community which are really hard up—lower wage earners, men with large families or old age pensioners—cannot be affected by Income Tax cuts because they do not pay Income Tax at all.
Then he says that he will wipe out £60 million of Purchase Tax. Has he used that £60 million to help those people who are most hard up and who were not helped by Income Tax reliefs? Has he said, "I will now use a selective basis for this Purchase Tax relief to help the consumer"? What are the principles which he has followed? Nobody can see, in the pattern of his Purchase Tax reliefs, exactly what economic principles are guiding him. We have the free gift of umbrellas; whether he foresaw the Coronation summer or not, I do not know. Nor do I know the principles behind his other actions.
The Chancellor has given £8 million in relief of tax on luxury grade articles such as furs, perfumes, bird baths, chin-straps, sundials, horse brasses—articles which hardly crown the ordinary home. The weavers of Lancashire get can along without chinstraps or sundials and they do not get much in the way of perfumes and fur coats. When we are searching round for every penny the Chancellor gives away £8 million on items like that. Then he gives away £22 million on less essential articles—not strictly luxuries, but not strictly essentials.
He has given away that sum on gramophones, gramophone records, paper doyleys and cake ornaments, smokers' requisites, bead curtains, book markers, motor cars. Paper doyleys and cake ornaments may be welcome in every home, but they are not strictly necessary to the old age pensioners. The sum adds up to £30 million that the Chancellor has given away, yet there is not a penny in this Budget of tax relief on essential clothing, one of the key essentials in the home.
Food prices are rising, and the ordinary home is very hard hit. Clothing is the

second great essential in the home, and yet people are paying at present, under the D Scheme, tax on clothing which, under the old Utility Scheme, was tax free. Here there was a wonderful field in which, quite apart from the arguments about the export trade that were so ably deployed by my hon. Friend the Member for Rossendale, the Chancellor could, on the basis of fair shares, have given help.
Last year, when some of us asked that the D level should be raised to the point at which all the former utility items would be exempt, the Chancellor told us that it would cost from £30 to £40 million, and he said, "I am not able to spare that amount of money." This year he has spared that amount of money. He is sparing £30 million on perfumes, bird baths, chinstraps, sundials, and he could have given us that £30 million to wipe out tax on what was formerly utility clothing, and that would have helped the export drive and got us over all the problems of quality deterioration under the D Scheme, and put the ordinary consumer in the position in which he was before the D Scheme was introduced, so far as taxation on essentials is concerned.
As my hon. Friend the Member for Rossendale has pointed out, by the way that this Finance Bill has been drawn our hands are tied so that we cannot alter the D level. We cannot move an Amendment to that effect. We cannot move Amendments to make selective reductions in the Purchase Tax. We can move an Amendment only in the form in which we have put this one. What we are really asking for tonight is that in the interests of the principle of fair shares as well as in the interests of saving the Lancashire textile trade the Chancellor ought to concentrate as a priority on the textile industry. He ought to do it by the total abolition of the Purchase Tax on textiles; failing that, by the lifting of the D level. We regret that, instead of that, we have had this overall reduction in the rates of Purchase Tax without discrimination.
I think it is a warning to Lancashire that when we have a Tory Chancellor he does not believe in using the Budget for planning, and does not believe in using the instruments that are to his hands to secure full employment. We shall have unemployment in Lancashire; we shall have slumps in Lancashire, and a progressive shrinkage of this great industry of ours. I think Lancashire will note and


mark and remember the pathetic failure of hon. Gentlemen opposite today to show any kind of fight on this issue, any attempt to make the Chancellor climb down.
The hon. and gallant Member for Macclesfield (Air Commodore Harvey) was congratulating the Chancellor on having climbed down last year. Where is the pressure to persuade the Chancellor to climb down today? There have been only a few pathetic pleas from the other side of the Committee that the Chancellor might bear this matter in mind and look at it from time to time. Any Chancellor could promise to do that, and that is worth nothing. Lancashire will note the failure on the other side to fight on this issue.

6.15 p.m.

Squadron Leader A. E. Cooper: I have listened for three years to speeches of the hon. Lady the Member for Blackburn, East (Mrs. Castle) on this subject of Purchase Tax. She has ridden so many horses on this subject in these years that it is difficult to find out what her real position is, so I have taken the trouble to arm myself with a copy of a speech she made on 20th June, 1950. She professed concern for the working classes, but I thought the peroration of her speech smacked of hypocrisy in a big way, because what did she say in winding up her speech of 20th June, 1950? These are her words:
My theme tonight is this: when hon. and right hon. Gentlemen opposite talk about this great shadow of Purchase Tax over ordinary working-class homes they are grossly exaggerating the real picture."—[OFFICIAL REPORT, 20th June, 1950; Vol. 476, c. 1214.]

Mrs. Castle: The hon. and gallant Gentleman really is badly out of date, because the purpose of that speech which I made in 1950, which I hope to redeliver on the later stages of this debate tonight, because it is highly relevant, was to point out that the only way to help the working-class families was by the selective removal of Purchase Tax. Labour Chancellors did that. My theme tonight has been dictated by the fact that between 1950 and now we have had the D Scheme, and the shadow of Purchase Tax falls now on ordinary homes, because people are now paying Purchase Tax on Utility clothing, and I say that the Chancellor should have lifted that shadow today.

Squadron Leader Cooper: At least we have livened up things which were tending to become a little tedious. We all remember the speech the hon. Lady made then. She stood here, we well remember, in a white frock, and the "Daily Herald" the following morning placarded: "Lady in white stands up against Tory jeers." Of course, the story was different then.

Mrs. Castle: It was different.

Squadron Leader Cooper: In those days the Conservative Party were in Opposition and calling for reductions in the Purchase Tax, and it was the hon. Lady, who, we all imagine, was a Treasury stooge in those days, who put the case for the Treasury; and she made that long speech in answer to very forceful arguments put by my right hon. Friend the Member for Aldershot (Mr. Lyttelton) and my right hon. Friend the Member for Chippenham (Sir D. Eccles). We called for very selective reductions in Purchase Tax, but the Labour Government and the hon. Lady opposed them. Let us remember her words again. We were, she said, grossly exaggerating this great shadow of Purchase Tax on the working-class homes.

Mrs. Castle: Mrs. Castle rose——

Squadron Leader Cooper: I have given way already to the hon. Lady.

The Chairman: Order. Only one hon. Member can be standing at one time.

Mr. Anthony Greenwood: On a point of order. Is it not quite out of accordance with the traditions of this Committee for an hon. Member opposite to accuse an hon. Member on this side of hypocrisy and then not have the decency himself to give way?

The Chairman: It certainly would be out of order, but the hon. and gallant Member did not say that, or I should have stopped him.

Hon. Members: He did.

Mr. Douglas Jay: Further to that point of order. I thought I heard the hon. and gallant Member say that the latter sentences of the speech of my hon. Friend the Member for Blackburn, East (Mrs. Castle) smacked of hypocrisy. Surely that is what he said?

The Chairman: That is a rather different thing from accusing an hon. Member of hypocrisy.

Squadron Leader Cooper: I did give way before to the hon. Lady, and she herself made no criticism of my observation.
There are only two points I wish to make. The first is to join in the general chorus levelled at the Chancellor today on the iniquities of Purchase Tax as a tax. It is the most stupid and vicious tax ever levied in this country. It puts us back into the position that "The gentlemen in Whitehall know best what is good for us"—a doctrine first promulgated by the right hon. Member for Battersea, North (Mr. Jay). The result of Purchase Tax on industry in this country is disastrous at each Christmas time and in the months up to the Budget, because everybody is speculating on whether there will be any alteration, and the tendency is for business to dry up. We really must get away from this sort of thing.
I say just this to the hon. Lady the Member for Blackburn, East, who criticises many of the reductions which have been made. I am not employed in the bird-bath, chin-strap or bead-curtain industry, but I can well imagine that people who are employed in those industries are very anxious about their employment, and no matter how small the number may be it is important that they should be retained in employment. Many of the so-called luxury industries have provided a considerable amount of income to this country over the last two or three years. Also, we must never lose sight of the fact that it is the development of a successful home market which enables industry to lower its costs, so that greater export possibilities result.
The hon. Lady criticised the reduction of tax on motor cars. I wonder whether she would find support for her criticism amongst Members of her own party who sit for Birmingham or Coventry divisions, which have been seriously affected but are now enjoying some renewed hope as a result of the concessions made by my right hon. Friend.

Mr. Frederick Mulley: Does the hon. and gallant Gentleman not realise that the employment situation in

the motor car industry is such that, although Purchase Tax has been reduced, it is impossible to get a popular make of car on immediate delivery, so there is no need to make a reduction in Purchase Tax on export grounds?

Squadron Leader Cooper: The hon. Gentleman should read back over HANSARD for the pre-Budget months to see some of the Questions asked by his hon. Friends week after week begging for something to be done about this matter. The fact that it is now impossible to get immediate delivery of a car is surely evidence of the success of my right hon. Friend's policy.
There is one constituency point I should like to make. Within my division is one of the largest manufacturers of electrical components in the country, the Plessey Company, which employs more than 9,000 people. They have been severely hit by the excessive Purchase Tax on radios, television sets and necessary component parts. This great industry, not only in my division but in other divisions, is a vital industry in the defence of our country in time of trouble; it is essential to retain in this industry a proper and adequate supply of skilled workmen.
I hope it will be possible this year, or perhaps next year, to eliminate Purchase Tax altogether and to substitute, if some substitute is necessary, perhaps a general sales tax of a very modest extent, such as is exercised in some other countries without any real difficulty. We really must get away from this penal impost of 25, 50 and 75 per cent. tax on all these various commodities.

Mr. S. Silverman: I think the Committee will be extremely grateful to the hon. and gallant Member for Ilford, South (Squadron Leader Cooper) for having intervened in the debate at all. In its administration Purchase Tax is, after all, at least as much the business of the Board of Trade as of the Treasury, and if the President of the Board of Trade felt himself in some way inhibited from taking part in this debate—I am sure he must have views about the incidence of Purchase Tax on the vital export trade in textiles—then I suppose it was an act of political finesse that the Parliamentary Private Secretary to the President of the Board of Trade should intervene where his chief was unable to do so.

Squadron Leader Cooper: Let me say quite frankly that the President of the Board of Trade had no idea I was going to speak this afternoon.

Mr. Silverman: In that case one can only hope that the hon. and gallant Gentleman, doing his diligent duty as Parliamentary Private Secretary to the President of the Board of Trade, will tomorrow morning draw his chief's attention to the debate we are having this afternoon, and in particular to the important contribution to that debate which he himself has made.
In this debate we are not dealing merely with textiles. We are dealing with the incidence of Purchase Tax as a whole. There is no doubt at all that this is a highly unpopular tax, because in all essentials it is a bad tax. What makes it so bad is that in its origin it was never intended to be a tax for revenue at all. It was introduced in order to restrain consumption at a time when the restraint of consumption was vital unless an unheard-of domestic inflation was to run away with our war-time economy. In the days when Purchase Tax was first adopted reluctantly by the House of Commons, Chancellors of the Exchequer would have been delighted if they had got no revenue out of it.
It may be—and many people have thought so—that there is a certain anomaly in trying to control inflation by a tax which necessarily increases prices. The answer to that anomaly was that it was the only thing to do at a time when the production of consumable commodities was necessarily being reduced while the total purchasing power of the community as a whole was rising as a result of bringing into wage-earning production, and therefore into the consumer market, two million people who for nearly a generation and a half had been excluded from the market altogether. Therefore, anomalous as it sounds, there was some sense during the war in trying to control inflation by increasing prices, because in that way the case for goods that were becoming less and less available was restrained.

Mr. Ellis Smith: They could have been rationed.

Mr. Silverman: Many of us in those days—my hon. Friend was one, and I

think I may claim to have been another —thought that the same object could have been achieved by a much stricter rationing process than the one adopted.
I am only trying to explain, at least so far as I have always understood it, what happened at the time. But that is not the situation today. All the Budget speeches delivered by the Chancellor of the Exchequer since the last Election have not regarded the question of restraining inflation by reducing consumption as the principal difficulty when attacking Purchase Tax. They have always said, "We need the money." In other words, what began as a tax to restrain inflation by reducing consumption has now become a revenue tax.
6.30 p.m.
It is as a revenue tax that it now falls to be considered. That was what made part of the speech of my hon. Friend the Member for Blackburn, East (Mrs. Castle) so relevant when she talked about what use is made by the Chancellor of the £60 million which he is giving up out of his Purchase Tax revenue. She said that he had abandoned the principle of using the Budget and the manipulation of our revenues—distribution of taxes and the imposition of taxes in some cases—as an instrument of social justice and national planning. She said that in making that abandonment he had gone back to the days before Labour Chancellors. My hon. Friend is not here, but I should like to have said to her that the right hon. Gentleman is going much further back than that.
It was not a Labour Chancellor that first began this process of using the annual Budget as a means of redistributing the national wealth in the interests of social justice. That was done by the late Mr. Lloyd George in the 1910 Budget. What the right hon. Gentleman is doing is going back to the Budget policies, or lack of Budget policies, of the pre-1909 Budget date. How does that apply to the matter with which I wish principally to concern myself, as so many other hon. Members have done—the question of Purchase Tax as it affects the textile trade generally and more particularly the cotton textile trade?
It is, I think, common ground on both sides of the Committee—and it is almost


too elementary to be worth saying again —that the people in these islands cannot live without an export trade. I do not think that one need waste argument in trying to persuade hon. Members of that. I think it is also common ground that in today's conditions the textile trade, and particularly the cotton textile trade, is at least one of the principal industries upon which this country must rely for its export trade.
The third thing that is beyond any kind of dispute is that for very many years the cotton textile trade has had the utmost difficulty in keeping its head above water. Something has been said about the improvement in the cotton trade in the last 12 months and the contribution made to that improvement by the proposals or policies of the Chancellor last year. One of my hon. Friends rather exploded that claim when he pointed out that the whole of the contribution was one of production.
Another thing that is not in dispute is that throughout that period and now the competitive world conditions in which the textile trade has continued to maintain its workers and to make its contribution to our balance of payments are hardening against us. Germany is coming rapidly back into the market. Japan is coming rapidly back into the market. In my opinion—although I dare say this will not be so readily accepted—the opportunities of recapturing the Chinese market which were lost 30 years ago and which now we could recapture are being quite unnecessarily neglected.
What is the most serious part of that competition? Lancashire has never had anything to fear from the competition of anybody in the high-class goods which it makes. It has had nothing to fear from America or Germany or Japan or anybody else. The trouble has been that we cannot compete against the unfair labour coditions particularly in the Far Eastern countries in the sale of the cheaper and rougher materials.
What did an hon. Member opposite, who spoke a little while ago, say about what was happening now to the Lancashire cotton trade as a result of the manipulation of these things—first, the D scheme and then Purchase Tax? He said—and there is no reason, so far as I know, to question his figures—that

whereas before those things more than 50 per cent. of Lancashire's production was in luxury or high-class goods, it is now reduced to 15 per cent. We have been pushed back from that kind of production in which we are supreme in the world and in which we find it easiest to meet and overcome the competition of other producers into that part of the production in which we find successful competition most difficult. This is the contribution of the Government to Lancashire's textile trade at a moment when we are fighting for our economic lives in difficult world conditions.
Government supporters go about patting themselves and one another on the back about the great contributions they have made in saving the textile trade of this country. It is really fantastic to think that people can be so self-deceived by their mistaken party loyalties as to believe such obvious nonsense which is not accepted anywhere else than in this Committee.
There have been a number of speeches on the Opposition side, and the hon. Member for Cheadle (Mr. Shepherd) was quite open and honest—I cannot think that he knew the facts, because he is too intelligent a person to have said what he said if he had known them—when he said that there is no case at all for the special relief of the textile trade from the incidence of Purchase Tax. Apparently that is what the Government believe too, because they have granted no special relief; but of all the hon. Members who have spoken on (hat side of the Committee, to say nothing of those who have spoken on this side, he was the only one to say that.
The right hon. Gentleman the Member for Blackburn, West (Mr. Assheton) made a speech; he always does; he represents Blackburn, West and, therefore, when we are talking about the cotton trade, its Member must be here; and if the interests of the constituency pull the right hon. Gentleman one way and his loyalty to his party pulls him another, then he is an old skilled Member of the House and he knows how to make exactly the kind of tight-rope balancing effort to which it is a delight to all of us to listen as a debating performance but which will bring very cold comfort to his constituents. The right hon. Gentleman made a speech last year in which he


wanted Purchase Tax removed altogether from cotton textiles. Is he still of that opinion?

Mr. Assheton: Yes, I said so today.

Mr. Silverman: This is really wonderful. The right hon. Gentleman said last year that he was in favour of it and he appealed passionately to the Government to abolish Purchase Tax altogether on textiles. He could have had his way. There was nothing to stop him. The Government's majority is only 17. There are more than 17 Conservative Members for Lancashire cotton towns. I said this to him then. He did not even need to go into the Division Lobby against his Government, though I am sure he will recognise that hon., and certainly right hon., Members would not be afraid to do that in a just and right cause.
After all, this was a matter on which the prosperity, and indeed the solvency, of the most important of our export industries depended. The right hon. Gentleman was convinced then, and is convinced now, that what is really needed is the removal of Purchase Tax altogether. He had only to go to the Chancellor of the Exchequer and say "Purchase Tax must come off. There are 17 good men and true, good loyal Members of the Conservative Party, representing Lancashire constituencies, who say 'We know this industry, and we are conscientiously convinced that this is the only remedy for it, and we are afraid that we shall have to vote for it because honest men do not think and say one thing and then vote against it.'" But the right hon. Gentleman would not do it. He was "very grateful" for having received 25 per cent, of what he thought right.

Mr. Assheton: The hon. Gentleman will at least recollect that the cure was effective.

Mr. Leslie Hale: Was it?

Mr. Silverman: What does the right hon. Gentleman mean by that? Does he really mean that the 25 per cent, of what he demanded has cured the disease that he was trying to cure?

Mr. Assheton: What I mean is this. I still want Purchase Tax removed from textiles, and I still hope it will be

removed from textiles in due course, but on that occasion the concessions made by the Government, which were worth £37 million, had the effect of restoring employment to the people in my constituency and in the hon. Gentleman's constituency.

Mr. Silverman: That seems to be only another form of words designed this time to make vague and confusing what the right hon. Gentleman's previous intervention had made crystal clear. Let us get back to that. It is better that way. What I want to know—I asked the right hon. Gentleman this a long time ago, and he said "Yes"—is whether he still believes that the removal of Purchase Tax altogether from the cotton textile trade is necessary. It would not, of course, be necessary if the disease were already cured. If 25 per cent. of it would do the trick, he was last year asking for four times as much as he needed. If the cure had already been effective, it would be quite unnecessary for him to ask for the removal of Purchase Tax now.
6.45 p.m.
I take it that what he really means—it is no doubt true—is that the little that was done last year was done in the right direction and had some success, that it would have had more success if more had been done, and that if Purchase Tax were now removed altogether there would be more success still. Then, what is he waiting for? Why does he not see that it is done? Last year he expressed his gratitude for having got 25 per cent. of what he thought was necessary, and this year, having got nothing whatever, he is apparently more grateful even than he was last year.
This really is not the way to treat a serious question. I do not want to use hard words like "humbug" and "hypocrisy" and the words which were used by an earlier speaker about my hon. Friend the Member for Blackburn, East, but I must say that nothing could be more unfair than for an hon. Member to make speeches in a constituency, speeches in the House of Commons and speeches in a Committee of the House of Commons designed to make the people listening so anxiously, in West Blackburn and in Lancashire, to what he says believe that he is on their side when he is not really on their side, because he is not


willing to exercise the power with which they entrusted him as they wish him to exercise it, and as he knows to be right. Nothing can destroy the prestige of Parliamentary democracy quicker and more effectively than that which gives rise to the assumption that, whereas totalitarian states govern by force, democracies govern by fraud.
The Government have left the Purchase Tax on textiles whose prices it raises, and this has the effect of reducing the income of the workers. I am not concerned with averages; I know that one can so balance things as to make a man who receives less money in his weekly pay packet believe that he is really getting more. When the cotton industry is driven from the higher-class goods to the lower-class goods, this affects the wages of the workers because, in their highly complicated wage systems, their wages depend not merely on the amount of goods which they produce but on the character of the goods they produce. They receive lower rates for producing lower-class goods. Thus, while the high prices remain, the wages of the workers will be reduced.
In these circumstances, what the Chancellor did was to take his £60 million and give it away on the same principle as he gave away his reliefs in Income Tax. What can be more insane economically than to retain Purchase Tax on ordinary clothing but to reduce it on expensive mink coats by more than it is reduced in the case of ordinary clothing, to relieve the consumers of the best luxury goods more than one relieves the trade on which one depends to maintain one's balance of payments in a difficult world? This is the clearest possible indication of the Government's philosophy in these matters.
The Chancellor was criticised a great deal from these benches for the incompetence of his Budget. I think he was unfairly criticised. I think it was a very able Budget. Those who criticised him thought he was concerned with a financial and economic policy. He was not. Judged by those standards, his Budget was all that was complained of it. But he was concerned with a political Budget as a member of a Government with a narrow majority, wondering how they could maintain themselves in power and increase the slender margin of votes which kept them there.
The Chancellor quite rightly and quite intelligently came to the conclusion that the thing to do was to go for the marginal voter in the marginal constituency, to deal with the middle wage earner and increase the tax relief for such a man as to leave him with more money in his pocket. In effect, he said, "Let us redistribute the national income in his favour, let us take subsidies off foodstuffs and other things."

The Chairman: I think the hon. Member is getting rather wide of the Amendment.

Mr. Silverman: I do not think so, with great respect. We are discussing the reasons which led the Chancellor to do what he did, and I am relating it to the general problem of the Government, as I have no doubt the Chancellor himself did when he was considering what proposals he would make. However, perhaps I have said enough to indicate the kind of point I have in mind.
What we are now attacking is the Government's general plan for making life easier for the electorate whom they wish to woo at the expense of those whom the Government realise they have no hope whatever of influencing or converting. That is a thoroughly immoral thing to do, and the Government will pay the penalty for it when the time comes.

The Economic Secretary to the Treasury (Mr. R. Maudling): I hope that by rising at this time to put the Government's point of view on this question of the Purchase Tax I shall be assisting the Committee to make progress with the very large amount of work we have yet to do on this Bill. We have already had a substantial debate in which many points of view have been put, and I shall try to cover the various points which have been advanced from both sides of the Committee.
The hon. Member for Nelson and Colne (Mr. S. Silverman), in the course of a most fluent if, I thought at times, somewhat inconsistent speech, dwelt a good deal on the textile trade, and particularly the cotton textile trade. That has been true of the whole debate. A great deal of emphasis has been laid on the position of the cotton textile industry, which is natural in view of its great importance and the importance in our economy of the textile industry generally.
As the hon. Member for Nelson and Colne pointed out, these Amendments that we are discussing deal with a pretty wide range of articles except articles at the highest rate of Purchase Tax. Nevertheless, it is to the articles at the highest rate that most reference has been made in the speeches of hon. Members opposite. I want to start by saying one or two general things about Purchase Tax.
As the hon. Member rightly said, there has been a change of emphasis in the attitude of Governments to Purchase Tax. I think the main change of emphasis occurred during the period of the Labour Government from 1945 to 1951. But whenever it took place, it has taken place. This tax started as a war-time device designed to restrain consumption. Now it has become embedded in the fiscal system to such a depth that it is not easy to prise it out.
The amount of money that it yielded last year was over £300 million and in this financial year, even with the reductions, it will be £260 million. That is a large amount of money indeed for any Chancellor to throw away. It is a large item in our fiscal programme, and the tax now covers an extremely wide range of articles. It is, on the whole, true that most of the necessities of life have now been exempted from Purchase Tax. The hon. Member for Blackburn, East (Mrs. Castle) rightly said that Labour Chancellors had removed Purchase Tax from articles of necessity like pots and pans. I do not see how she can now blame my right hon. Friend for not removing the tax from them again.
It is quite true that a number of necessary articles are outside the range of the Purchase Tax. Luxury articles like mink coats and jewellery produce only a tiny amount of income in comparison with the amount which comes from articles in the second or third categories, which could best be described as the amenities of life. We cannot say they are really necessities, and we cannot think of them as luxuries. They are the amenities of life and that is where the Purchase Tax now runs strongest. In considering his Budget proposals this year, my right hon. Friend thought there was some slack in the economy and that it was right and proper to reduce taxation by a substantial

amount. Obviously in any reduction of taxation Purchase Tax was an early candidate.
I am not quite certain myself what is the attitude of the party opposite to the Purchase Tax as a tax, because obviously there are arguments both for and against it. I think the arguments for the tax are, on the whole, rather more theoretical than practical, but that does not mean that they are any less attractive in argument. The hon. Member for Itchen (Mr. Morley) pointed out, quite rightly, that a feature of the Purchase Tax is that, though it is an indirect tax, it is not necessarily regressive in its effect. It has the theoretical attraction that it can be used as a means of increasing indirect taxation without the tax falling most heavily on the smallest income group.
Then there is the argument that Purchase Tax is selective. Detailed articles can be selected on which tax is to be placed, categorising them, as the hon. Member for Nelson and Colne said, as luxuries, semi-luxuries, amenities and half-amenities. A whole wide range of articles in the shop can be taxed, and by this process we reach an equation in social justice which makes for perfect economic planning. That is, as I say, an attractive theory, but it is not so good in practice. When the hon. Lady the Member for Blackburn, East said that my right hon. Friend appears to have abandoned economic planning, if she is referring to detailed economic planning and the theory that the State should try to direct the detailed activities of industry, then we have not abandoned that theory. We never held it.
There are, on the other hand, strong practical objections to the Purchase Tax. There are the well-known difficulties of administration; the anomalies that arise between one kind of article and another; the constant difficulties in preventing evasion; the difficulties experienced by traders; the problem of taxed stocks, of which we shall hear a great deal later on; the difficulties created for traders because, as the hon. Member for Bristol, North-East (Mr. Coldrick) said, they are unpaid tax collectors in this matter of Purchase Tax; the difficulties of manufacturers who find the flow of orders in many trades varies very much at the beginning of the year before the Budget; and the effects of Purchase Tax on the


cost of living, all of which amount to the fact that this intrinsically is an unsatisfactory tax, and it is for that reason a very unpopular tax.
I must say that I was very interested to find how many hon. Gentlemen on the other side of the Committee now subscribe to the belief that the Purchase Tax is a thoroughly bad tax and should be abolished. I think the hon. Member for Bristol, North-East said that he and those with whom he is associated had constantly objected to Purchase Tax as being a bad tax. Why are those hon. Members now most eloquent in opposing the tax at a time when a Conservative Government has made sweeping reductions in it? They are a little late in introducing their criticisms.

7.0 p.m.

Mr. John Rankin: As one associated with the group to which the hon. Gentleman refers, may I say that we are opposed to the continuance of the tax and that we have always contested it?

Mr. Maudling: I wonder if the hon. Gentleman was also opposed to its continuance in 1947, 1948, 1949 and 1950, because he did not register that opposition in the Division Lobby.
If it is agreed that Purchase Tax is in many ways unsatisfactory, then I think the Committee will agree that my right hon. Friend was correct in making substantial reductions in it in his Budget. Their total cost in a full year amounts to £60 million, which I suggest is a large sum. I do not think it would be widely argued that my right hon. Friend would have been justified in going further than he has done in this matter. Indeed, it could not be argued by those critics of the Budget who suggest that it was a soft Budget and was not making sufficient provision for possible economic difficulties in the future. It is impossible for hon. Gentlemen opposite to try to argue simultaneously that there are difficult times ahead for which the Chancellor has not made provision and that he should have further stimulated personal consumption by greater reductions in the Purchase Tax.
The next problem is how to distribute these reductions, given a reduction in total of £60 million, within the various categories which are subject to Purchase Tax.

There were two possibilities. One was a general reduction in the main rates of Purchase Tax, the course which my right hon. Friend adopted. The other was a selective reduction of various rates of Purchase Tax, concentrating on reducing those goods at the lower rates at the expense of the goods at the higher rates. I understand the latter course to be the point of view adopted by hon. and right hon. Gentlemen opposite.
Once again, clearly there were arguments in favour of those alternative courses, but I hope I can show that the course which the Government have adopted is, on the balance of the argument, undoubtedly the right course. Certainly the course of making selective reductions and putting all the weight of the reduction on the cheapest article at the lowest rate of tax is politically the most attractive. The fact that we have not done it provides most of the raw material for half of the speeches we have heard from the other side of the Committee. Obviously hon. Gentlemen opposite consider that there is political advantage in leaving a high rate of tax on luxury articles and concentrating reductions on articles of more general consumption.
The political argument in a matter like this is not the decisive argument. The decisive argument is the economic argument. In the first place, it is not easy to proceed with Purchase Tax reductions on a selective basis in present circumstances. I am glad to see that the hon. Lady the Member for Blackburn, East has returned. She pointed out that many of the necessities of life have now, by the acts of previous governments, been eliminated from the Purchase Tax field. That leaves a wide range of articles which we can call amenities, but the hon. Lady referred to radio sets and rather suggested it was wrong to reduce the tax on those because relatively few people buy them; whereas the hon. Gentleman the Member for Bristol, North-East was saying earlier that a radio set is a necessity for every householder.

Mrs. Castle: The hon. Gentleman misunderstood that part of my argument. I was merely giving it as an example of where, to fit in the needs of the defence programme with economic needs, a previous Labour Chancellor had the courage to increase the tax.

Mr. Maudling: If I misunderstood the hon. Lady, I apologise. It is difficult to choose between articles like attaché cases, gas heating appliances, motor cars, television sets, radio and to say that one is a necessity and one is not. They are all amenities and it is difficult to pick and choose between them without making unjustifiable discriminations. It is also true that if, instead of proceeding by a general 25 per cent. reduction, my right hon. Friend had proceeded by abolishing the tax entirely on certain selected articles, that would have greatly aggravated the problem of the tax-paid stocks. I think I am right in saying that the Hutton Committee in their report referred to the additional difficulty created for retailers if Purchase Tax reductions were made too drastic at any one time.
Then there is another economic objection to the idea that there should be selective reductions which should be concentrated on the goods at the lowest rate of Purchase Tax. It is that the strongest economic case for Purchase Tax reductions is for those articles which bear tax at the highest rate, such as cutlery which the hon. Member for Sheffield, Park (Mr. Mulley) knows so well, silverware to which the hon. Member for Handsworth (Sir E. Boyle) often refers, the fur trade to which my hon. Friend the Member for Billericay (Mr. Braine) refers. All are trades of great importance to this country which are suffering greatly from the prohibitive rate of Purchase Tax.

Mr. Mulley: We in Sheffield would also be pleased if the Chancellor would reduce Purchase Tax on spoons, knives and forks, which the hon. Gentleman apparently thinks are amenities but which I think are necessities.

Mr. Maudling: I doubt if in strict logic it could be argued that they were necessities, but they are certainly necessities for civilised life.

Mr. Percy Shurmer: If we have two more years of Tory rule we shall not want any more knives, forks or spoons.

Mr. Maudling: Those trades contribute substantially to our export trade. Our exports of furs last year, for instance, amounted to about £19 million, the export of silverware amounted to £10 million, the export of toilet preparations—to

which somewhat disparaging references are sometimes made; I do not know why —amounted to £6 million. All those industries are of great importance. They are traditionally the craft industries of this country, and it is wrong to go on impeding their progress and restricting their activities for the sake of purely party political dogma. It is contrary to the national interest.
Sometimes I get a little tired of hearing the argument about high-quality goods based entirely on exports. Why should we consider it wrong that the products of, say, our silversmiths and jewellers should not be sold and enjoyed in this country? Do hon. Gentlemen opposite look forward to a time when those industries will have been completely wiped off the face of the map or wholly confined to export orders? I do not think that way, and I do not think that my hon. Friends on this side of the Committee think that way.
There are other reasons for a general reduction in Purchase Tax. There is no doubt that the wide differential between the rates was making administration of the tax nearly impossible. Evasion was becoming more widespread. The main reason, however, for reducing Purchase Tax as a whole, like the main reason for reducing the standard rate of Income Tax, is that it is too high, and we believe in making a direct frontal attack as we have done with taxation generally.
The two Amendments we are discussing are those dealing with the lowest rate and the middle rate which, it is suggested, should be further reduced. The first Amendment, which suggests a further reduction in the lowest rate of tax, would cost £30 million a year, which is the total cost of the Government reductions on the top rate and the middle rate; so that if we were not to produce another £30 million for Purchase Tax, if the total amount of Purchase Tax reduction is to be confined to £60 million, we can only proceed with further reductions at the lowest rate by wiping out any reductions in the two top rates.
The fact is that the amount yielded at the top rate is very small. The major yield is on the lowest rate, on motor cars, television sets, and so on. As for the middle rate, I am not certain what is the attitude of right hon. and hon. Gentlemen opposite and perhaps the right hon.
Gentleman the Member for Battersea, North (Mr. Jay) will make it clear? The main articles in the middle range are television, radio sets and motor cars. I do not know whether hon. Members opposite think that the tax on these things should go further down or should not have come down at all, because between them they seem to have taken both points of view at one time or another, with considerable variety and often with much eloquence. What is the attitude of hon. Members opposite? Should the tax on motor cars be further reduced, as their Amendment suggests? [An HON. MEMBER: "No."] Then why did they put down the Amendment?

Mr. Mulley: Has it not occurred to the hon. Gentleman that it might be possible that some items in the range should go up and others come down?

Mr. Maudling: It might be possible, but that is another matter.
I come now to the question of textiles, which has loomed so large in the course of our discussions. The year 1952 was undoubtedly a difficult one for the textile industry. The difficulties had started way back in 1951 with the reduction in the world demand for textiles. All textile exporting countries suffered severely and I think I am right in saying that some countries suffered even more severely than we did. That is why it is a peculiar argument that we heard from the hon. Member for Farnworth (Mr. Thornton), who made such a thoughtful speech but who implied that the depth of the textile recession in this country in 1952 was somehow or other the responsibility of my right hon. Friend in his Budget last year. It would be difficult to state the opposite of the truth with greater clarity.
The reason for the recession in production in 1952 was the falling off in retail sales, which, of course, always precedes by an interval of several months a recession of production and which had taken place in the summer of 1951. In 1952, therefore, my right hon. Friend was faced with a very difficult situation in the textile trades, and he took the measures to which reference has been made several times today: the special Government purchases, the reduction of the Purchase Tax rates on textiles, and the introduction of the D Scheme.
No one would claim that those measures alone were responsible for the improvement in the textile trades position in the last year, just as, I should have thought, no fair-minded person would ever have argued that the difficulties in the textile trades were due to the change of Government, although I have heard that suggestion sometimes put forward.
Nevertheless, it is quite clear that the effect of Purchase Tax reductions and Government orders has been to assist in a remarkable recovery in the textile industry. Production for the textile industry as a whole is now about 50 per cent. above the trough which was reached last July, when the recession was at its worst. Unemployment has shown a remarkable improvement. Taking the textile trades as a whole, as against an unemployment figure of 161,000 last May the figure for May this year is only 21,000. That is a dramatic change over the year, and it is only fair that hon. Members opposite should give some credit to my right hon. Friend for the measures he introduced last year.

Mr. Anthony Greenwood: Would it not also be equally fair to give the figures of the number of people who have left the industry in the meantime?

Mr. Maudling: It is true that the number of people employed in the industry has changed. I am not entirely surprised at that, because the structure of the textile industry is, clearly, changing. As I was about to point out, as between cotton textiles and non-cotton textiles there has been a considerable difference in the rate of recovery, which, again, may well be a reflection of the changing nature of the textile industry, which is being affected nowadays, I imagine, by the introduction, for example, of new fibres. Certainly, unemployment fell to the figure I have given, and in the North-East Lancashire Development Area unemployment, which last May was 17 per cent., is now down to 1.6 per cent., which is roughly the same as the national average.
So far as wool is concerned, production and exports in the first four months of this year have been near their post-war peak. So far as rayon is concerned, in the same four months fibres, spun yarn and mixtures all show record production figures. Cotton, it is true, is still below the peak which it had reached, but it is


appreciably up, as is shown by the figures given by the hon. Member for Farnworth and by the 90 per cent. figure which he quoted.
7.15 p.m.
A very significant figure, which has not yet been mentioned, is that sales of clothing—and it is upon sales that the production a few months later depends—in the second half of 1952 were 11 per cent. up in real terms on the same period of 1951; and in the first four months of 1953 sales of clothing are again 11 per cent. up on a similar period in 1952. That should be borne in mind when hon. Members opposite take too gloomy a view of the prospects of the textile trade. It does not help the textile trade for people to take an unnecessarily gloomy view of its prospects.

Mr. Blackburn: Mr. Blackburn rose——

Mr. Maudling: I am sorry, but I have given way too much already and cannot give way again.
Therefore, there are considerable improvements. There has been a remarkable improvement in the position of the textile industries, but we are still faced with the strong representations that are made, and rightly made, by people engaged particularly in the cotton textile industry. As I understand it, the main argument is that, as a result of the Government's policy, there has been a lamentable reduction in the production of top-quality cloth. That seems to me to be a singularly odd argument to come from the hon. Member for Nelson and Colne. In one sentence he says how wrong it is to encourage the production of top-quality fur coats—and we sell a great number of them abroad—and in the next sentence he says how wicked we are to allow the textile trade to produce more top-quality articles and fewer Utility articles.

Mr. S. Silverman: If what the hon. Gentleman means by inconsistency is that I advocated that the remedies that are applied to the fur coat trade may not be suitable to the cotton textile trade, I admit the charge of inconsistency. But does the hon. Gentleman or do the Government advocate that there are to be no differences at all, that the same policy with regard to Purchase Tax shall be applied to all industries, irrespective of their domestic or export conditions?

Mr. Maudling: The hon. Member knows perfectly well that that suggestion is quite unfounded. He has only to look at the rates of Purchase Tax. What I meant by inconsistency in his speech was the use in succeeding sentences of mutually conflicting arguments——

Mr. Silverman: They were not.

Mr. Maudling: —which at times may be politically convenient. It is, surely, inconsistent to argue at one and the same time that we should stop the production of luxury articles and encourage the production of others.

Mr. Silverman: Nobody said that.

Mr. Maudling: When the D Scheme was introduced last year, one of the criticisms to be made was that it would give too much help to the luxury articles and put too much burden on the Utility articles. Hon. Members opposite cannot get away with these inconsistencies. The fact is that the introduction of the D Scheme and the reduction of Purchase Tax last year were of particular assistance to the top-quality textiles; they get the benefit of the reduced rate of the tax, and they get the benefit of the D Scheme.
It is true that many representations are made by responsible and informed bodies on the question of deteriorating standards. I would never under-estimate the importance of giving very close attention to all that is said by these experienced people, but it is quite right, on the other hand, to point out that it is not necessarily true that because in the last year qualities have fallen, or, it is said, qualities have been to some extent debased, the working of the D Scheme is to blame. This year also market conditions have changed continually, particularly the home market, and have changed to the detriment of the higher-priced and higher-quality article. I do not think the argument can necessarily be sustained that it is the D Scheme that is responsible for the deterioration to which reference has been made.
In its issue of 25th April, the "Economist," a periodical I always like to have the opportunity of quoting when it says the sort of thing I like to quote, said this about the textile question:
It is difficult to believe that the D Scheme of itself is to blame if the goods in question are no longer selling as well as they did.


… Many retailers report that since the D Scheme was introduced, customers have paid less regard to the tax element in the retail price of textiles and that they themselves pay little attention to the relatively small sums involved in all but a few lines. They argue, moreover, that since the slump in home sales last year, the tendency has been to 'trade up'—to improve rather than to lower the quality of the stock carried.
That certainly would be my impression of the result one would expect from the introduction of the D Scheme. Of course, it is not perfect—no scheme of taxation is ever likely to be perfect—but certainly it is a great improvement on any scheme which existed before in getting over the difficulty of a blind spot by letting in the clutch of Purchase Tax progressively—to mix the metaphor—as opposed to the rapid change-over we had under the old Utility Scheme.

Mr. Ellis Smith: Mr. Ellis Smith rose——

Mr. Maudling: I am sorry, I cannot give way again, as I have given way so often.
Turning to the textile industry as a whole, I think it right to quote this figure. The argument has often been made this afternoon that there is a case for special treatment for the textile industry as compared with other industries subject to Purchase Tax. But the textile industry has already had very special consideration. These figures, I think, are most significant. The Purchase Tax on textiles represents only 5 per cent. of total turnover, while Purchase Tax on the remaining range of goods subject to the tax is 34 per cent.
When one is asked for special treatment for the textile industry, I admit straight away the immense importance of this industry to the life of our country, to the life of Lancashire and to the export trade, but I think it only fair to point out that, as against 34 per cent. incidence of Purchase Tax on goods as a whole, textiles are now paying only 5 per cent. of their turnover.
My right hon. Friend will, of course, watch most closely and constantly—as he does—the performance of the textile industry, but he considers at the moment, on the figures I have given and the arguments we have heard, that there is really not adequate justification for a further reduction in Purchase Tax on textiles this year. Reductions last year cost the Exchequer £17 million, but textiles are still bringing £43 million to Purchase Tax,

which is a very large amount of revenue and, if conceded on this head, would have to be made up somewhere else.
From the arguments heard this afternoon it does not seem to me that most of the problems to which hon. Members referred could be overcome without a complete abolition of Purchase Tax. To concede £43 million to this industry, although it is of great importance, whilst other industries are paying much higher rates, does not seem justifiable to my right hon. Friend at this stage. For these reasons, we ask the Committee to reject the Amendment.

Mr. Morley: Could the hon. Gentleman make some reference to the question of the abolition of Purchase Tax on school requisites, which was raised earlier in the debate?

Mr. Jay: I have listened to the whole of the debate this afternoon and should like to say two things to hon. Members opposite. We have heard a great deal to the effect that this is a bad and vicious tax. Indeed, according to Conservative doctrine, all high taxation is bad. I should point out that our main Amendment proposes to reduce the 25 per cent. rate to 16⅔ per cent. rate. Therefore, the right hon. Member for Blackburn, West (Mr. Assheton) and all who agree with him can at least take one step in that direction by supporting our Amendment.
The second thing I say to hon. Members opposite is this. Several of them, including the hon. Member for Cheadle (Mr. Shepherd) advocated the complete and early abolition of Purchase Tax. I suppose he was acting as a Treasury stooge at that point as he told us he was confident and that it was the intention of the Chancellor to abolish the tax entirely.
I would point out that that is not what the Chancellor said in his Budget speech. Obviously, the right hon. Gentleman does not regard the Purchase Tax as a temporary tax, as he said this about it:
I have also to think, in this connection, of the buoyancy of the revenue in the longer term and of the stability of the tax."—[OFFICIAL REPORT, 14th April, 1953; Vol. 514, c. 52.]
So the issue between us this afternoon is plainly not whether this tax is temporary or whether it is long-term. The


issue between us is, as the Economic Secretary quite fairly said, whether the Purchase Tax should be mainly a tax falling heavily on what he calls the luxuries and amenities and less heavily or not at all on the necessities. We hold that it should fall much less heavily on the necessities and that is the purpose of our main Amendment.
In view of what the Economic Secretary said, I must explain that, under the Budget Resolution, it is impossible for us to suggest the elimination of the tax or the exemption altogether of a number of separate commodities. By the Resolution we can only propose a reduction in the rates. We propose a reduction from 25 per cent. to 16⅔ per cent. We think that that should be carried out in addition to further exemptions, and we also propose to raise the D level by 10 per cent.
That, I understand, is out of order under the present Bill. I must say it is going a little too far to draw the Resolution so tightly as to make it out of order to discuss a further raising of the D level.

Mr. Maudling: Is it not true that in 1949 the Government of the right hon. Member eliminated all discussion of Purchase Tax?

Mr. Jay: No, what we did was to make it possible to make proposals similar to those the Government were making. This year it is impossible to deal with individual commodities and, therefore, we put down the second Amendment as a token Amendment in order that the articles taxed at 50 per cent. could be discussed, as they have been discussed by my hon. Friends.
I wish to answer the hon. Member for Darwen (Mr. Fletcher-Cooke), who asked what was our policy and whether we were in favour of widening the differential between luxuries and other commodities. I do not think he has to wait for a future party document, but will see the answer in this Amendment. Our policy is to widen the differential by lowering the tax on necessities and near necessities and that can be carried a stage further if that Amendment is approved today.
We have two main criticisms of what the Government have done. First, apart from the taxicabs and pianos, in this Budget they have not exempted any

further necessities. Secondly, in our view, they have placed the D level in the case of textiles, boots and shoes and furniture —do not let us forget furniture—at too low a level. That is the burden of our criticism on textiles. After listening to the Economic Secretary, I am still rather uncertain why the Government did not follow the policy of the previous Government of progressively exempting further necessities year by year.
We were always urged to do that when the party opposite were in Opposition. In particular, dusters used to be waved before our eyes in those days, and I remember that the present Colonial Secretary used to be particularly eloquent on the subject of soap. The Economic Secretary was not here, but he may remember that, in 1948, there were many individual Amendments which were wholly within the Rules of Order. He was inclined to argue that it was impracticable to carry on this process and go further. As my hon. Friend the Member for Blackburn, East (Mrs. Castle) said, we did so in 1951 and in several years.
We selected such things as toothbrushes, bootlaces and school satchels and exempted them from the tax entirely. We should have liked to have gone further. The reason we did not go on to soap, cutlery and some of the other things was that in that year it would have cost too much revenue. After all, that was a year in which defence expenditure was increasing and in which, on balance, there was no tax revenue to give away. But this year the situation is quite different. The Chancellor has given away £170 million, and, therefore, he has not, so far as I can see, any substantial reason for not continuing this process of exemption.
7.30 p.m.
The Economic Secretary produced an extraordinary further excuse for that this evening. He said that he recognised that we had done this in the past, and he said that therefore there are now no necessities left to exempt; he said there was nothing left but the amenities and luxuries—I accept his three-fold classification for this purpose. But soap is still taxed. Does he really regard soap as not being a household necessity? I can assure him that it is taxed. Cutlery is taxed—spoons, forks and knives, all those essential household articles. Even if we do not include the handbags which have been


discussed this afternoon, it is a fact that razor blades are subject to tax. Would the Economic Secretary not agree that they are a household necessity in a modern community? Is linoleum, or hardware and other things of that kind? I think that the Conservative Party is remarkably out of date if the hon. Gentleman thinks that razor blades, cutlery, soap and linoleum are not ordinary articles of household necessity.
If the Chancellor's difficulty is one of finding things to exempt I can make him a good many suggestions out of the Schedule. Does he know that Christmas stockings are subject to tax at present? I should have thought they might be a possible candidate for exclusion. I notice that Christmas trees of not more than four inches in height are subject to tax, though apparently if they are more than four inches in height they are exempt—a rather curious inverted D line in the case of Christmas trees. It is clear that there are a very large number of household articles which are subject to tax and which could have been eliminated this year.
I think there was a particular reason for doing that this year, namely, that food prices at present are rising so rapidly. The Financial Secretary unwarily said in the Budget debate that the Purchase Tax changes which the Chancellor had made would contribute substantially to lowering the cost of living.

The Financial Secretary to the Treasury (Mr. John Boyd-Carpenter): That statement has been misquoted once already by one of the right hon. Gentleman's hon. Friends. When I referred to the tax reductions I said expressly that I was not saying what effect it would have on the index or the cost of living, and that I did not wish to exaggerate it. If the right hon. Gentleman will quote the whole passage I shall be perfectly content.

Mr. Jay: The hon. Member said that it would make a contribution to a steady reduction in prices, helping in particular those with lower incomes. I fully agree that he did not mention the index, but he suggested it would be a major help to those with lower incomes. As he now does not wish to exaggerate, we can agree about that.

Mr. Boyd-Carpenter: As the right hon. Gentleman has been good enough to quote from what I have said, perhaps he will allow me to do so. I said:
It is not for me to exaggerate—and I have no intention of doing so—what effect they may or may not have on the cost-of-living index or on the cost of living, but it is a fact that this cut is a contribution to a steady reduction in prices, …

Mr. Jay: As the hon. Gentleman finished his quotation in the middle of his sentence, I will continue it. He actually said:
… a steady reduction in prices, which must be of peculiar and special benefit to those whose incomes are lowest."—[OFFICIAL REPORT, 15th April, 1953; Vol. 514, c. 256.]
That being so, and bearing in mind that the food price index has risen by more than 10 per cent. since the beginning of 1952. there was a special case for making reductions on some of these household articles this year. The remarkable thing is that in the whole range of clothes and boots and shoes the only things which have enjoyed any reduction this year are fur coats and other fur garments. That seems an extraordinary result at such a time.
Although a great number of commodities fall under these two Schedules, we have naturally and rightly, discussed textiles for some time this afternoon. Having listened to the Economic Secretary, I was struck by the extraordinary difference between his account of the cotton industry at the present time and that of Sir Raymond Streat in the document which has been quoted. The hon. Member for Cheadle (Mr. Shepherd) said that he did not see why the textile industry should ask for special treatment. I do not think that the textile industry is asking for special treatment. The issue is at what level the D line should stand, and, therefore, what proportion of the textile industry's products should be exempt from tax.
There are many industries whose products are wholly exempt from tax. There is no exactly similar treatment industry by industry for the purpose of Purchase Tax. For instance, in the case of books there is complete exemption and, therefore, the percentage of turnover in that trade which is paying Purchase Tax is nil. Our complaint is that the Chancellor put the D level at too low a point in the first place, and that he has


obstinately insisted on keeping it there. We have had in the past year a great deal of evidence of the effects of the introduction of the D Scheme at that level.
The Economic Secretary entirely ignored all the statements which Sir Raymond Streat made in the really formidable memorandum which he sent to the Chancellor and in the letter which he wrote to the Chancellor after the Budget. We had exactly the same statement as that of Sir Raymond Streat from the right hon. Member for Blackburn, West in the second part of his speech this afternoon. We notice that in the first part of his speeches the right hon. Gentleman always praises the Chancellor and in the second part always condemns what the Chancellor has done. It is quite clear that as the D Scheme has worked out there has been a debasement of quality in large sections of the cotton industry. The right hon. Member for Blackburn, West said that there had been general debasement of fine cloths. That is surely a very serious situation in this very important industry. It is rather remarkable that the Economic Secretary passed it by so blithely at the end of his speech.
The Economic Secretary mentioned the "blind spot," but did not mention the fact that, according to what Sir Raymond Streat has also told us, a new and worse blind spot has appeared as a 'result of the operation of the D Scheme. The evidence is, therefore, that there has been a debasement of quality, that exports have been hampered, and that a larger proportion of textile products are now being taxed than was the case under the previous Utility Scheme. That is our complaint, and so far as I can see none of those facts are in serious dispute. They were not seriously disputed by the Economic Secretary, yet he proposes to take no action about them.
I would quote only one further sentence from Sir Raymond Streat's letter to the Chancellor after the Budget. He states:

"The denial to textiles of participation in the general concession, apparently on the grounds that something was done a year ago and that uniformity of rates of tax is more important than meeting the actual facts of the case, fills the texile industries with concern and dismay."

That is well expressed. The Chancellor's defence was that he had done something a year ago and could not be expected to do it again this year.

Apparently, instead of having fair shares between different sections of the community, the Chancellor has evolved a doctrine of fair shares between different Budget years. That seems to us to be an extremely clumsy and unselective way of dealing with Purchase Tax. Surely we ought to look at the actual effects on production, trade, employment, cost of living, and so on, and take our decision on those grounds.

I believe if that had been done the Chancellor this year would inevitably have raised the D level in the case of textiles, and added to the number of exemptions in the necessities or near necessities still subject to tax. But this action of doing nothing because something was done last year, regardless of the facts, precisely illustrates the Government's clumsy and non-selective method of administering the Purchase Tax, which is what we particularly complain of.

We have mainly debated those commodities falling under the new 25 per cent. rate. We condemn the action of the Chancellor in not giving any further relief at this time. I think it would be open to us to have two separate Divisions on these two Amendments, and for the reasons I have given, because the Chancellor's action is neither fair to the consumer nor good for industry, unless my right hon. Friends wish to continue this debate further—we shall be able to debate the Question, "That the Clause stand part of the Bill" later—I would advise them to carry out support for the first Amendment to a Division.

Question put, "That 'twenty-five stand part of the Clause."

The Committee divided: Ayes, 267; Noes, 249.

Division No 182.]
AYES
[7.40 p.m.


Allan, R. A. (Paddington, S.)
Assheton, Rt. Hon. R. (Blackburn, W.)
Barber, Anthony


Alport, C. J. M.
Astor, Hon. J. J.
Barlow, Sir John


Amory, Heathcoat (Tiverton)
Baldock, Lt.-Comdr. J. M.
Baxter, A. B.


Anstruther-Gray, Major, W.
Baldwin, A. E.
Beach, Maj. Hicks


Ashton. H. (Chelmsford)
Banks, Col. C.
Beamish, Maj. Tufton




Bell, Philip (Bolton, E.)
Higgs, J. M. C.
Orr, Capt. L. P. S.


Bell, Ronald (Bucks, S.)
Hill, Dr. Charles (Luton)
Orr-Ewing, Charles Ian (Hendon, N.)


Bennett, F. M. (Reading, N.)
Hill, Mrs. E. (Wythenshawe)
Orr-Ewing, Sir Ian (Weston-super-Mare)


Bennett, Dr. Reginald (Gosport)
Hinchingbrooke, Viscount
Osborne, C.


Bennett, William (Woodside)
Holland-Martin, C. J.
Partridge, E.


Bevins, J. R. (Toxteth)
Hollis, M. C.
Peake, Rt. Hon. O.


Birch, Nigel
Holmes, Sir Stanley (Harwich)
Perkins, W. R. D.


Bishop, F. P.
Hope, Lord John
Peto, Brig. C. H. M.


Black, C. W.
Hopkinson, Rt. Hon. Henry
Pickthorn, K. W. M.


Boothby, R. J. G.
Hornsby-Smith, Miss M. P.
Pilkington, Capt. R. A.


Bossom, A. C.
Horobin, I. M.
Pitman, I. J.


Boyd-Carpenter, J. A.
Horsbrugh, Rt. Hon. Florence
Powell, J. Enoch


Boyle, Sir Edward
Howard, Gerald (Cambridgeshire)
Price, Henry (Lewisham, W.)


Braithwaite, Sir Albert (Harrow, W.)
Howard, Hon. Greville (St. Ives)
Prior-Palmer, Brig. O. L.


Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)
Hudson, W. R. A. (Hull, N.)
Raikes, Sir Victor


Brooke, Henry (Hampstead)
Hutchinson, Sir Geoffrey (Ilford, N.)
Rayner, Brig. R.


Brooman-While, R. C.
Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Redmayne, M.


Browne, Jack (Govan)
Hyde, Lt.-Col. H. M.
Rees-Davies, W. R.


Buchan-Hepburn, Rt. Hon. P. G. T.
Hylton-Foster, H. B. H.
Remnant, Hon. P.


Bullard, D. G.
Jenkins, Robert (Dulwich)
Roberts, Peter (Heeley)


Bullus, Wing Commander E. E.
Jennings, R.
Robertson, Sir David


Burden, F. F. A.
Johnson, Eric (Blackley)
Robinson, Roland (Blackpool, S.)


Butcher, Sir Herbert
Johnson, Howard (Kemptown)
Robson-Brown, W.


Butler, Rt. Hon. R. A. (Saffron Walden)
Jones, A. (Hall Green)
Rodgers, John (Sevenoaks)


Campbell, Sir David
Joynson-Hicks, Hon. L. W.
Roper, Sir Harold


Carr, Robert
Kaberry, D.
Ropner, Col. Sir Leonard


Cary, Sir Robert
Keeling, Sir Edward
Russell, R. S.


Channon, H.
Kerr, H. W.
Ryder, Capt. R. E. D.


Clarke, Col. Ralph (East Grinstead)
Lambert, Hon. G.
Salter, Rt. Hon. Sir Arthur


Clarke, Brig. Terence (Portsmouth, W.)
Lambton, Viscount
Savory, Prof. Sir Douglas


Clyde, Rt. Hon. J. L.
Lancaster, Col. C. G.
Scott, R. Donald


Cole, Norman
Langford-Holt, J. A.
Shepherd, William


Colegate, W. A.
Law, Rt. Hon. R. K.
Simon, J. E. S. (Middlesbrough, W.)


Conant, Maj. R. J. E.
Legge-Bourke, Maj. E. A. H.
Smithers, Peter (Winchester)


Cooper, Sqn. Ldr. Albert
Legh, Hon. Peter (Petersfield)
Smyth, Brig. J. G. (Norwood)


Craddock, Beresford (Spelthorne)
Linstead, H. N.
Snadden, W. McN.


Crookshank, Capt. Rt. Hon. H. F. C.
Llewellyn, D. T.
Soames, Capt. C.


Crosthwaite-Eyre, Col. O. E.
Lloyd, Rt. Hon. G. (King's Norton)
Spearman, A. C. M.


Crouch, R. F.
Lloyd, Maj. Sir Guy (Renfrew, E.)
Speir, R. M.


Crowder, Petre (Ruislip—Northwood)
Lloyd, Rt. Hon. Selwyn (Wirral)
Spence, H. R. (Aberdeenshire, W.)


Darling, Sir William (Edinburgh, S.)
Lockwood, Lt.-Col. J. C.
Spens, Sir Patrick (Kensington, S.)


Davidson, Viscountess
Longden, Gilbert
Stanley, Capt. Hon. Richard


Deedes, W. F.
Low, A. R. W.
Stevens, G. P.


Digby, S. Wingfield
Lucas, Sir Jocelyn (Portsmouth, S.)
Steward, W. A. (Woolwich, W.)


Donaldson, Cmdr. C. E. McA.
Lucas, P. B. (Brentford)
Stewart, Henderson (Fife, E.)


Donner, P. W.
Lucas-Tooth, Sir Hugh
Stoddart-Scott, Col. M.


Doughty, C. J. A.
Lyttelton, Rt. Hon. O.
Storey, S.


Douglas-Hamilton, Lord Malcolm
McAdden, S. J.
Strauss, Henry (Norwich, S.)


Drayson, G. B.
McCallum, Major D.
Stuart, Rt. Hon. James (Moray)


Duncan, Capt. J. A. L.
Macdonald, Sir Peter
Studholme, H. G.


Duthie, W. S.
McKibbin, A. J.
Summers, G. S.


Eccles, Rt. Hon. D. M.
Mackie, J. H. (Galloway)
Sutcliffe, Sir Harold


Elliot, Rt. Hon W. E.
Maclay, Rt. Hon. John
Taylor, William (Bradford, N.)


Erroll, F. J.
Maclean, Fitzroy
Thomas, Rt. Hon. J. P. L. (Hereford)


Fell, A.
Macleod, Rt. Hon. Iain (Enfield, W.)
Thomas, Leslie (Canterbury)


Finlay, Graeme
MacLeod, John (Ross and Cromarty)
Thomas, P. J. M. (Conway)


Fisher, Nigel
Macmillan, Rt. Hon. Harold (Bromley)
Thompson, Kenneth (Walton)


Fleetwood-Hesketh, R. F.
Macpherson, Niall (Dumfries)
Thompson, Lt.-Cdr. R. (Croydon, W.)


Fletcher-Cooke, C.
Maitland, Comdr. J. F. W. (Horncastle)
Thornton-Kemsley, Col. C. N.


Ford, Mrs. Patricia
Maitland, Patrick (Lanark)
Tilney, John


Fort, R.
Manningham-Buller, Sir R. E.
Touche, Sir Gordon


Foster, John
Markham, Major S. F.
Turner, H. F. L.


Fraser, Sir Ian (Morecambe &amp; Lonsdale)
Marlowe, A. A. H.
Turton, R. H.


Galbraith, Rt. Hon. T. D. (Pollok)
Marples, A. E.
Vane, W. M. F.


Galbraith, T. G. D. (Hillhead)
Marshall, Douglas (Bodmin)
Vaughan-Morgan, J. K.


Gammans, L. D.
Marshall, Sir Sidney (Sutton)
Vosper, D. F.


Garner-Evans, E. H.
Maude, Angus
Wakefield, Edward (Derbyshire, W.)


George, Rt. Hon. Maj. G. Lloyd
Maudling, R.
Walker-Smith, D. C.


Godber, J. B.
Maydon, Lt.-Comdr. S. L. C.
Ward, Miss I. (Tynemouth)


Gomme-Duncan, Col. A.
Medlicott, Brig. F.
Waterhouse, Capt. Rt. Hon. C.


Gough, C. F. H.
Mellor, Sir John
Watkinson, H. A.


Graham, Sir Fergus
Monckton, Rt. Hon. Sir Walter
Webbe, Sir H. (London &amp; Westminster)


Gridley, Sir Arnold
Moore, Lt.-Col. Sir Thomas
Wellwood, W.


Grimston, Hon. John (St. Albans)
Morrison, John (Salisbury)
Williams, Rt. Hon. Charles (Torquay)


Grimston, Sir Robert (Westbury)
Mott-Radclyffe, C. E.
Williams, Gerald (Tonbridge)


Hall, John (Wycombe)
Nabarro, G. D. N.
Williams, Sir Herbert (Croydon, E.)


Harden, J. R. E.
Nicholls, Harmar
Williams, Paul (Sunderland, S.)


Hare, Hon. J. H.
Nicholson, Godfrey (Farnham)
Williams, R. Dudley (Exeter)


Harris, Frederic (Croydon, N.)
Nicolson, Nigel (Bournemouth, E.)
Wills, G.


Harris, Reader (Heston)
Nield, Basil (Chester)
Wood, Hon. R.


Harrison, Col. J. H. (Eye)
Noble, Cmdr. A. H. P.
York, C.


Harvey, Ian (Harrow, E.)
Nugent, G. R. H.



Harvie-Watt, Sir George
Nutting, Anthony
TELLERS FOR THE AYES:


Hay, John
Odey, G. W.
Sir Cedric Drewe and


Heald, Sir Lionel
O'Neill, Phelim (Co. Antrim, N.)
Mr. Oakshott.


Heath, Edward
Ormsby-Gore, Hon. W. D.








NOES


Acland, Sir Richard
Hale, Leslie
Paling, Rt. Hon. W. (Dearne Valley)


Adams, Richard
Hall, Rt. Hon. Glenvil (Colne Valley)
Paling, Will T. (Dewsbury)


Albu, A. H.
Hall, John T. (Gateshead, W.)
Pannell, Charles


Allen, Arthur (Bosworth)
Hamilton, W. W
Paton, J.


Allen, Scholefield (Crewe)
Hannan, W.
Pearson, A.


Anderson, Alexander (Motherwell)
Hargreaves, A.
Peart, T. F


Anderson, Frank (Whitehaven)
Harrison, J. (Nottingham, E.)
Popplewell, E.


Attlee, Rt. Hon. C. R.
Hayman, F. H.
Porter, G.


Bacon, Miss Alice
Healey, Denis (Leeds, S.E.)
Price, Joseph T. (Westhoughton)


Balfour, A.
Henderson, Rt. Hon. A. (Rowley Regis)
Proctor, W. T.


Barnes, Rt. Hon. A. J.
Herbison, Miss M.
Pryde, D. J.


Bartley, P.
Hewitson, Capt. M.
Rankin, John


Bellenger, Rt. Hon. F. J.
Hobson, C. R.
Reeves, J.


Bence, C. R.
Holman, P.
Reid, Thomas (Swindon)


Benn, Hon. Wedgwood
Holt, A. F.
Reid, William (Camlachie)


Bevan, Rt. Hon. A. (Ebbw Vale)
Houghton, Douglas
Richards, R.


Bing, G. H. C.
Hoy J. H.
Roberts, Albert (Normanton)


Blackburn, F.
Hudson, James (Ealing, N.)
Roberts, Goronwy (Caernarvon)


Blenkinsop, A.
Hughes, Cledwyn (Anglesey)
Robinson, Kenneth (St. Pancras, N.)


Blyton, W. R
Hughes, Emrys (S. Ayrshire)
Ross, William


Boardman, H
Hughes, Hector (Aberdeen, N.)
Royle, C.


Bottomley, Rt. Hon. A. G.
Hynd, H. (Accrington)
Shackleton, E. A. A.


Bowen, E. R.
Irvine, A. J. (Edge Hill)
Shinwell, Rt. Hon. E.


Braddock, Mrs. Elizabeth
Irving, W. J. (Wood Green)
Short, E. W.


Brockway, A. F.
Isaacs, Rt. Hon. G. A.
Shurmer, P. L. E.


Brook, Dryden (Halifax)
Jay, Rt. Hon. D. P. T.
Silverman, Julius (Erdington)


Broughton, Dr. A. D. D.
Jeger, George (Goole)
Silverman, Sydney (Nelson)


Brown, Thomas (Ince)
Jeger, Dr. Santo (St. Pancras, S.)
Simmons, C. J. (Brierley Hill)


Burke, W. A.
Jenkins, R. H. (Stechford)
Skeffington, Arthur


Burton, Miss F. E.
Johnson, James (Rugby)
Slater, Mrs. (Stoke, N.)


Butler, Herbert (Hackney, S.)
Johnston, Douglas (Paisley)
Slater, J. (Durham, Sedgefield)


Callaghan, L. J.
Jones, David (Hartlepool)
Smith, Ellis (Stoke, S.)


Castle, Mrs. B. A.
Jones, Frederick Elwyn (West Ham, S)
Smith, Norman (Nottingham, S.)


Champion, A. J.
Jones, Jack (Rotherham)
Snow, J. W.


Chapman, W. D.
Jones, T. W. (Merioneth)
Sorenson, R. W.


Chetwynd, G. R.
Keenan, W.
Soskice, Rt. Hon Sir Frank


Clunie, J.
Kenyon, C.
Sparks, J. A.


Coldrick, W.
Key, Rt. Hon. C. W
Steele, T.


Collick, P. H.
King, Dr. H. M.
Stokes, R. Hon. R. R.


Corbet, Mrs. Freda
Kinley, J.
Strachey, Rt. Hon. J.


Cove, W. G.
Lee, Frederick (Newton)
Summerskill, Rt. Hon. E


Craddock, George (Bradford, S.)
Lee, Miss Jennie (Cannock)
Swingler, S. T.


Crosland, C. A. R.
Lever, Harold (Cheetham)
Sylvester, G. O.


Crossman, R. H. S.
Lever, Leslie (Ardwick)
Taylor, Bernard (Mansfield)


Cullen, Mrs. A.
Lewis, Arthur
Taylor, John (West Lothian)


Daines, P.
Lipton, Lt.-Col. M.
Taylor, Rt. Hon. Robert (Morpeth)


Dalton, Rt. Hon. H.
Logan, D. G.
Thomas, David (Aberdare)


Darling, George (Hillsborough)
MacColl, J. E.
Thomas, lorwerth (Rhondda, W.)


Davies, Ernest (Enfield, E.)
McGhee, H. G.
Thomas, Ivor Owen (Wrekin)


Davies, Harold (Leek)
McGovern, J.
Thomson, George (Dundee, E.)


Davies, Stephen (Merthyr)
McInnes, J.
Thornton, E.


de Freitas, Geoffrey
McKay, John (Wallsend)
Timmons, J


Deer, G.
McLeavy, F.
Tomney, F.


Delargy, H. J.
MacMillan, M. K. (Western Isles)
Turner-Samuels, M.


Dodds, N. N.
MacPherson, Malcolm (Stirling)
Ungoed-Thomas, Sir Lynn


Driberg, T. E. N.
Mainwaring, W. H.
Usborne, H. C.


Dugdale, Rt. Hon. John (W. Bromwich)
Mallalieu, E. L. (Brigg)
Viant S. P.


Ede, Rt. Hon. J. C.
Mallaieu, J. P. W. (Huddersfield, E.)
Wade, D. W


Edwards, John (Brighouse)
Mann, Mrs. Jean
Wallace H. W.


Edwards, Rt. Hon. Ness (Caerphilly)
Manuel, A. C.
Watkins, T. E.


Evans, Albert (Islington, S.W.)
Marquand, Rt. Hon. H. A.
Webb, Rt. Hon. M. (Bradford, C.)


Evans, Edward (Lowestoft)
Mason, Roy
Weitzman, D.


Evans, Stanley (Wednesbury)
Mayhew, C. P
Wells, William (Walsall)


Fernyhough, E.
Mellish, R. J
West, D. G.


Fienburgh, W.
Messer, F.
Wheatley, Rt. Hon. John


Finch, H. J.
Mikardo, Ian
Wheeldon, W. E.


Fletcher, Eric (Islington, E.)
Mitchison, G. R
White, Mrs. Eirene (E. Flint)


Follick, M.
Monslow, W.
White, Henry (Derbyshire, N.E.)


Foot, M. M.
Moody, A. S.
Whiteley, Rt. Hon. W.


Forman, J. C.
Morgan, Dr. H. B. W.
Wilkins, W. A.


Fraser, Thomas (Hamilton)
Morley, R.
Wiley, F. T.


Freeman, John (Watford)
Morris, Percy (Swansea, W.)
Williams, David (Neath)


Gaitskell, Rt. Hon. H. T. N.
Morrison, Rt. Hon. H. (Lewisham, S.)
Williams, Rev. Llywelyn (Abertillery)


Gibson, C. W.
Mort, D. L.
Williams, Ronald (Wigan)


Glanville, James
Moyle, A.
Williams, Rt. Hon. Thomas (Don V'll'y)


Gooch, E. G.
Mulley, F. W.
Williams, W. R. (Droylsden)


Gordon-Walker, Rt. Hon P. C.
Murray, J. D.
Wilson, Rt. Hon. Harold (Huyton)


Greenwood, Anthony (Rossendale)
Nally, W.
Winterbottom, Richard (Brightside)


Grenfell, Rt. Hon. D. R.
Neal, Harold (Bolsover)
Woodburn, Rt. Hon. A.


Grey, C. F.
Noel-Baker, Rt. Hon. P. J.
Wyatt, W. L.


Griffiths, David (Rother Valley)
Oldfield, W. H.
Yates, V. F.


Griffiths, Rt. Hon. James (Llanelly)
Oliver, G H.



Griffiths, William (Exchange)
Orbach, M.
TELLERS FOR THE NOES:


Grimond, J.
Oswald, T
Mr. Bowden and Mr. Holmes.


Question put, and agreed to.

The Temporary Chairman (Mr. G. H. R. Rogers): Does the right hon. Gentleman wish to move the Amendment in page 6, line 9, to leave out "fifty," and to insert "forty-five"?

Mr. Gaitskell: As my right hon. Friend explained, this was really a token Amendment so that we might discuss the range of articles covered by the 50 per cent. tax. In the circumstances, I do not propose to move it.

Sir Edward Boyle: I beg to move, in page 6, line 9, to leave out "seventy-five." and to insert:
sixty-six and two-thirds.
It might be for the convenience of the Committee if the corresponding Amendment to line 35 was taken at the same time. The Chancellor in his Budget speech stressed very clearly the evil effects of Purchase Tax at its pre-Budget rates. He went out of his way to mention that this specially applied to goods chargeable at the higher rates of tax. He said:
… the fact of the matter is that the present rates are too high, and the margins between rates too wide. The difficulties are most apparent in the case of goods chargeable at the higher rates, where in some cases the tax has proved heavier than the industries concerned can bear, and a danger of redundancy of labour has shown itself. All this is doing damage to home trade, to skill, craftsmanship and tradition and, above all, is reacting adversely on our all-important export trade.
Furthermore, my right hon. Friend specifically mentioned the jewellery and silverware trades when he said:
… traditional skills must be fostered if they are not to die."—[OFFICIAL REPORT, 14th April, 1953; Vol. 514, c. 52–3.]
It may be within the recollection of the Committee that on 20th March I moved a Motion, which was agreed to by the House, calling on the Government to give urgent attention to the problems of the jewellery and silverware industry. I, for my part, was very grateful to the Chancellor for specially mentioning these industries in his Budget speech.
I hope that in moving this Amendment this evening I shall not be accused of looking a gift horse in the mouth or of failing to realise that the reduction that my right hon. Friend has already made of 25 per cent. has certainly proved of real benefit to many businesses. Incidentally, immediately after my right hon.

Friend's reference to the jewellery and silverware industries he also mentioned the cosmetic industry. Those of us who watched the television programme last Sunday, "What's My Line?", and saw a lady who called herself a lipstick-polisher may have felt that the range of craft industries was rather wider than we had hitherto supposed.
My hon. Friends and I have tabled this Amendment for two reasons. The first is because in our view the margins between the rates of Purchase Tax are still too high. In saying that I can at least claim the support of the leading article in this morning's edition of "The Times." My right hon. Friend said in his Budget speech that an all round reduction of the rates of Purchase Tax would have the effect of reducing the margins between them. That is perfectly true in a strictly arithmetical sense, but one must remember that if we reduce all the rates of Purchase Tax by the same fractional amount, the proportional difference between the various rates remains exactly the same as before and, in my view, the margin between the various rates is still too high.
Even more important, the 75 per cent. rate of tax is still a far higher rate than the craft industries can bear. I do not want to repeat all the arguments I used when I moved my Motion in March on the jewellery and silverware industries, because I know that the Committee want to make progress. I confine myself to two points in connection with the craft industries. First, a 75 per cent. rate of tax means that cheapness will remain the aim of the producer at the cost of design and finish. Secondly, a 75 per cent. rate of tax will still handicap the home market very considerably and thus injure the export trade by reducing the number of ranges which a manufacturer can offer his customer from stock.
I dare say that it will be said that a reduction from 75 per cent. to 66⅔ per cent. would not by itself make any very great difference. But there are two arguments on the other side. First, if this reduction far which I am asking were made, the margin between the highest rate and the rate immediately below it would be reduced. Secondly, if this reduction in the highest rate of Purchase Tax were made from 75 per cent. to 66⅔ per cent. that would give the Chancellor more


elbow room for future action. My right hon. Friend would then be in a position at a later date to reduce the tax on jewellery and silverware to 33⅓ per cent., which I believe to be the highest rate which this industry can bear without serious damage, while, at the same time, he could leave the tax on certain other articles—such as cosmetics—where it is at the moment.
8.0 p.m.
I fully realise the Chancellor's difficulties. There is, first, the revenue aspect. If the reduction were made, on such calculations as I have been able to make, the Chancellor would lose between £3 million and £4 million. I say that on the basis of some figures which my hon. Friend the Financial Secretary kindly gave me in March in answer to a written Question. As one who thinks that, if anything, the Chancellor may slightly have erred in generosity in this year's Budget I certainly would be the last to underrate the importance of the revenue aspect. There is the question, which I certainly do not want to discuss this evening, of retailers' stocks. Those hon. Members who sit for industrial or urban constituencies know very well the problems which the retailers have to face when the Purchase Tax is reduced.
None the less, I cannot help feeling that the Chancellor's Purchase Tax proposals in their present form do not quite carry out the objective which he announced in his Budget speech, and that is why my hon. Friends and I have put down this Amendment. I therefore ask the Government to look at this matter again, and, if they feel that they cannot make an overall reduction such as I have suggested, I would at least ask the Financial Secretary to give the Committee an assurance that the problems of the craft industries will be kept constantly under review.

Mr. Bernard Braine: This Amendment seeks to bring much-needed relief to at least two trades which have earned for this country a high reputation for craftsmanship and quality production, but which in the last few years have been slowly taxed out of existence. The fact that my right hon. Friend has seen fit to reduce the 100 per cent. rate of Purchase Tax is in itself a recognition that

the burden has become exceedingly heavy. The contention of my hon. Friends and myself is that it is still too heavy.
I am very conscious of the fact that in normal circumstances, in advancing a case of this kind, one is faced with prejudice, but I never thought that I should encounter so much prejudice as was evinced in the earlier stages of this debate. The argument seems to run that little sympathy need be wasted on those who are engaged in the production of fine silverware and jewellery and well-made fur garments because they are engaged in luxury trades which cater for the few, that they ought to be taxed anyway, and that if in the process they are taxed out of existence, it will not matter very much. That is a jaundiced view. It is stupid, too. The craft industries of this country make a contribution to the national economy out of all proportion to the numbers engaged in them.
May I take as an illustration the fur trade, and here let me say at once that I have a small but indirect interest which I must declare. The fur trade of this country employs between 9,000 and 10,000 people. It exports skins and fur garments worth roughly £25 million a year. It earns hard currency. It contributes to our invisible exports. It adds lustre to our reputation for craftsmanship. Whether furs are luxuries or not in the view of hon. Members opposite, the fact is that they help this country to earn its bread and butter. [Interruption.] Yes, indeed; I ask the hon. Gentleman to look at the matter objectively. In fact, those who are engaged in these trades contribute to the Welfare State, and they have a case which should be heard.
The Economic Secretary to the Treasury argued in his winding-up speech in the last debate that it was all very well to call for tax reductions, but how was his right hon. Friend the Chancellor to replace the revenue that would be lost thereby? That is a proper argument. But the position here is that, unless there is a further substantial reduction in the tax, the revenue will melt away. It is already melting away. The Purchase Tax on furs in 1951 yielded £39 million. In the following year the yield fell to £2·7 million, and, though the latest figures have not been published, the downward trend is still continuing. It is continuing because the Purchase Tax at 100 per


cent., which has largely killed the home trade in fine silverware, is virtually strangling the fur trade.
I agree with those who think that this is a vicious tax. It is indeed; it is a levy upon skill, upon beauty and upon the rich but not inexhaustible fund of British craftsmanship. I do not believe that the reduction of the tax to 75 per cent. is going to help, but there is a very much more serious aspect of the matter which I invite the Committee to consider. By destroying the home market for silverware or furs, the Purchase Tax is, in effect, undermining our capacity to export, and that is something which concern's every one of us.
Let the figures speak for themselves. In the first quarter of 1952, our exports of furs amounted to £7.2 million; in the first quarter of this year, the figure had fallen to £5.5 million. It may be argued that that is evidence of some recession in trade, but indeed it is not. What is happening is that we are getting a smaller share of the existing market. Our competitors are not saddled with the same tax burden. I wonder if the Board of Trade or the Treasury have studied the figures of West German exports in this particular connection? For the last three years, the value of West German exports has been in the region of £1 million a year, which is not a substantial figure, but in the first three months of this year it has exceeded £1 million, and that trend is continuing. The reason is that, while we are subject to crippling taxation, the Germans are subject only to a turnover tax of 6 per cent. It is the declared object of the Germans to transfer the international fur market from London to Frankfurt, and the Purchase Tax is their most valuable ally in this respect.
The world does not owe this country a living. The overseas buyer is selective. He wants the choicest materials, the best in craftsmanship, the latest in fashion, and if he cannot find these things in this country, he will turn elsewhere for them. Taste is not governed by Board of Trade regulations, and I do not think fashion can be decreed in advance by Financial Secretaries. It is quite impossible to provide overseas purchasers with what they want, or even to keep abreast of our competitors, unless there is a home market providing our craftsmen with the opportunity to experiment in style and design.
That is true of both silverware and jewellery, and of the fur industry, but it is particularly true of furs, for this reason. For three centuries, London has been the centre of a great international trade. There is no reason why it should be. It could quite easily depart to Frankfurt, Montreal or New York tomorrow. London will only remain the centre of that international trade so long as our merchants can offer the finest collections and assortments.
Anyone who knows anything about this trade will realise that skins vary considerably. The choicest ones are exported, and those which cannot be sold to overseas buyers have to be sold at home, but precisely because of the difficulty of selling at home, obviously merchants are restricting their imports, and by restricting imports the choice which can be offered to overseas buyers is also restricted. Thus, if imports fall, exports fall too. The trade is highly seasonal, and demand fluctuates violently from month to month. If continuity of employment, to which we all attach the greatest importance, is to be maintained, then a home market is essential.
The object of the reduction from 100 to 75 per cent. was, of course, to breathe new life into these craft industries. But I say quite frankly that I do not think it is enough. There are some firms who have had to close down even since the Budget. I have here an extract from a letter which has been sent to me in which the writer says:
After 39 years in business, during which 1, with my family, built up a reputation second to none for a well-made article, produced by well-trained craftsmen, I am now forced to close down … because of the vicious Purchase Tax. I am left at 60 years of age with nothing to show for my life's work. For the sake of my workpeople, the majority of whom have been with me since they left school, I have endeavoured to keep going. Originally, I had 48 workers. Last year this was cut down to 16, and this year that was cut still further to 10. Now these last 10 have had to be discharged.
The argument used about luxury industries by hon. Members opposite would not carry much weight or conviction with the workers in this industry who have lost their employment. This is not an isolated case. I have another letter from a business man who tells me:
My firm have been in the fur trade for 32 years. They have always carried on a good


class business, and have a very fine name for their productions throughout the world.
That firm is closing down at the end of the month.
All this has happened since the announcement that the rate of Purchase Tax was to be reduced from 100 to 75 per cent. Is it any wonder that in the silverware trade, where almost identical arguments can be used, the average age of craftsmen today is between 60 and 65. or that for every four youngsters who entered the fur trade before the war, only one is coming in today. Long centuries ago Chaucer reminded us—
The lyf so short, the craft so long to lerne.
It takes 15 to 20 years to train a good craftsman in the silverware industry, and much about the same time in the fur industry. Unless there is a steady stream of recruits into these industries they are doomed. They are doomed not because the world no longer needs what they produce. On the contrary, the figures I have produced show that others are moving into our markets because we stubbornly refuse to create the conditions in which these industries can pay their way.
I am not an unreasonable man, I trust, nor am I unmindful of the fact that my right hon. Friend the Chancellor has already made a considerable concession, and that, in the larger sense, he is concerned with creating conditions for the expansion of the economy as a whole. I recognise with Burke that "to tax and to please, no more than to love and be wise, is not given to men"—even to the best of Chancellors. Nevertheless I fear that in this case my right hon. Friend may not have gone far enough. I would remind him that the piano industry had to convince him that it was in extremis before any effort was made to come to its aid.
I ask him not to let the other craft industries be brought to that state before help is given, because once skill has been dispersed it may never be recovered. We are already going through a process where men are being cast off or driven into other industries. I suggest that for a country which very largely bases its hopes of recovery upon its rich and varied craftsmanship such a position would be a tragedy.

8.15 p.m.

Mr. Emrys Hughes: I do not wish to embarrass the Government, but if there is a revolt from the other side I shall have to vote for the Government. I well remember the debate which took place on a Friday when the hon. Member for Handsworth (Sir E. Boyle) moved his Motion, and I recollect it well because I never heard such a lot of crazy economics stated in such a short time in all my recollection of the House. But the Government gave way and started a policy of appeasement. Now along come the jewellery and the silverware trades, like Oliver Twist, and ask the Chancellor for more.
Where would the Chancellor have got his revenue if we had all presented the special interests of our constituents? I asked this question before, but I got no reasonable answer. We want £1,600 million for armaments and yet here are hon. Gentlemen opposite saying that jewellery, silverware and fur coats come before guns.

Dr. H. Morgan: If you want money, tax land values.

Mr. Hughes: I should be prepared to endorse that. I am not quite sure where fur coats come in, or whether the hon. Member for Billericay (Mr. Braine) put in a special plea for that industry on the assumption that the people who bought jewellery bought fur coats as well. I merely wish to point out that if we are to have the sort of economy in which we have to find huge sums every year for armaments, then hon. Gentlemen who represent the jewellery and fur industries must be prepared to face the consequences and sacrifice their constituents.
I hope that the Treasury will not follow this policy of appeasement of what is essentially a luxury trade. I believe that the home market for fur coats and jewellery could be fostered by increasing the purchasing power of the wages of the miners in my constituency. That might be a more economically sound way of solving the problem. I should very much like to see all the miners' wives in my constituency wearing fur coats.

Mr. Braine: Why not?

Mr. Hughes: Yes, why not. I think they are far more entitled to them than the people who have been displaying them in recent weeks. I should like to see a


great increase in the wearing of fur coats among miners' wives, and if jewellery is an essential of beauty, I know of no more deserving section of the community who would be entitled to it than the miners' wives.
Hon. Gentlemen opposite cannot have it both ways. They cannot have a Warfare State and a luxury State at the same time. I know that the Financial Secretary to the Treasury will be very grateful to me for my moral support, even if he does not approve of all that I have said.

Mr. Shepherd: I have listened with considerable interest and amusement to the intervention of the hon. Member for South Ayrshire (Mr. Emrys Hughes). I do not qualify fox his strictures in the sense that I do not rise to support the mover of the Amendment because of any constituency interest. It is true that I supported the Motion moved by my hon. Friend the Member for Handsworth (Sir E. Boyle) in March of this year.
I rise to support the case of the silverware industry because I think it merits our special consideration. As I said when we were discussing the previous Amendment, I am not in favour of discrimination, and I want to see this tax reduced by successive stages until it is eliminated altogether. In certain instances, however, a case might perhaps be made for discrimination, and I hope that the Committee and the Treasury will look at the position of the silverware industry as distinct from the jewellery industry. I think a case could be made for even more drastic action in the case of the silverware industry than is indicated in the terms of this Amendment.
There is no doubt that the silverware industry of this country is doomed unless some help is given to it. The fur industry is getting a reduced number of apprentices, but the silverware industry is getting none at all. No one wants to go into an industry that is dying. Leaving out the question of prejudice concerning who buys silverware, if we want to keep alive this craft then we must do something to put new life into the industry. I stress those words, because this industry's output is of lasting value. When we produce an article of silverware, it is not transient, but something which will be of vast benefit and will give pleasure to generations of people. I should not like to see

this industry die when it could be saved by Government action.
I am grateful for what my right hon. Friend the Chancellor said in his Budget speech and for his Purchase Tax concessions, but it is idle to pretend that a reduction of 10 per cent. in the retail price of silverware articles—that is what the reduction of tax means in practice— will save the industry. If we look at the cost of the articles concerned, we see that we are up against a big differential between the pre-war price and the postwar price. A tea-set which sold for £100 before the war, costs nearer £400 today. It is therefore wrong to think that we can deal with this desperate situation by reducing the retail cost by only 10 per cent.
This industry ought to be taken out of its present Purchase Tax Group 27 and put into Group 11, with electroplate ware. That would make a substantial contribution and would help the export trade. A lot of nonsense is talked about the effect of Purchase Tax on the export trade, but it is not nonsense in the case of silverware. We ought to produce new designs, which is very expensive in a dying industry. We cannot afford to produce new designs, and this has a serious effect upon production in the industry and upon its export potential.
I was concerned, in suggesting that we should take the industry out of Group 27 and put it into Group 11, to have the support of the retailers for such a proposal. So I got into touch with the National Association of Goldsmiths and asked them to approach their members to see whether they would be in favour of it. When I asked the association how far they represented the trade of the country, they replied that they represented 2,480 retail shops, including those of the principal West End jewellers, and 75 or 80 per cent. of the purchasing power of the retail trade.
The association sent letters to their members asking whether they would approve such a reduction, bearing in mind that they might have to stand a good deal of loss in consequence. The Secretary has written to me now and said that, in consequence of this inquiry, he is confident that 90 per cent. of the membership, and may be more, would welcome a further reduction. I give this information to the Committee because


it is important for us to realise that if there were a further substantial reduction the retail traders generally would be prepared to meet the consequences financially.

Mr. Mulley: I should like to endorse very strongly the excellent case that the hon. Gentleman is making for silverware, seeing that my own inquiries confirm the figures he has given. I understand that there are stocks of silverware in the shops that were actually there before Purchase Tax was introduced, so little buying has there been during the Purchase Tax period. Probably many of the existing stocks have never carried Purchase Tax at all.

Mr. Shepherd: I am grateful for the hon. Gentleman's intervention. I think just as strong a case can be made out for silverware as for pianos. The piano can be an instrument of torture, but silverware is always a source of joy, at any rate to me whenever I can afford to buy a piece. Therefore, if my right hon. Friend can see fit to abolish Purchase Tax altogether on pianos, I suggest there is abundantly a case for bringing down the tax on silverware from the present 75 per cent. to 33⅓ per cent.
We cannot wait very much longer. When we have got to a state where most of our craftsmen are engaged upon repairs or jobs outside those strictly for a silversmith and when no more apprentices are coming in, there is not much longer to wait before we reach the end of the industry. To give some idea of what has happened, I will take the figures for Birmingham, where, in 1937, the silverware industry produced 1,200,000 ounces. In 1951, the figure was 400,000 ounces, and in 1952 and 1953 the figures went down substantially again.
Therefore, there is a case for what I do not like in general principle, for discrimination, in order to save this industry. My right hon. Friend said that he would save the piano industry; I believe there is a case for saving the silverware industry. I cannot say there is so strong a case for jewellery, but there is a very strong case indeed for the silverware industry. I hope that between now and further stages of the Bill the Chancellor and the Financial Secretary will be able to give consideration to the suggestions I have made.

Mr. David Logan (Liverpool, Scotland Division): I want to call the attention of the Chancellor to a matter affecting not the export trade but the economy of the domestic household. This week my attention has been called to mirror manufacturers and processors, a body of men in the city of Liverpool. For many years I have had a very intimate knowledge of every class of furnishing, and I am able to speak with a knowledge of the subject although I have not spoken on this matter before.
These gentlemen are carrying on business among the poor and the middle-class, and they feel that their business is being ruined. Anybody who analyses the merits and demerits of the Purhase Tax—we shall go a long way before we find its merits—will know that the tax is not economic in any household. It is the greatest swindle of the day, but we have to accept it and use it to produce revenue. We ought, in matters of taxation, to deal honestly and sincerely, making those pay who are able to do so and relieving those who are getting less money. When I examine what these gentlemen complain about I find that they are justified.
This is only a very small matter. I shall not go into the whole question of the Purchase Tax. For eight years the trade has been trying to get a reduction in the Purchase Tax on the ordinary hanging mirror. Perhaps there are too many of us who do not like to see our faces, so it seems repulsive to make economies in that direction. Be that as it may, the first thing many young girls and fellows getting married think about is getting a mirror to hang over the chimney-piece in what they call the parlour, or in the kitchen. I put it to the Committee—I will not say as businessmen, because most of us are not businessmen, although we must consider the views of businessmen sometimes—that people must be given easier methods of buying, and to impose 5s. on 5s. for a mirror in a poor home, or even £1 on £1, is going beyond reason.
8.30 p.m.
I have received a two-page letter, which I will not read, but perhaps the Committee will take the substance of it from me. It says, in effect, that in 1948 there was a reduction from 100 per cent. to 75 per cent., but they now find that 70 per cent. of the skilled labour which used


to be employed in the glass trade has gone. In my humble opinion, industries like this, which give work to many people, ought to be maintained. A mirror in a house is not a luxury, it is a necessity.
With all due respect, I put it to the Financial Secretary that it is time we did away with this Purchase Tax, especially for the hanging mirror. No benefit is derived from it. If it were abolished, more work would be given to people in Liverpool, and it would be better for trade generally more would be spent by people. I put this simple proposition to the Financial Secretary in the hope that he will bring it to the attention of the Chancellor, to see whether he can remove at any rate some of this Purchase Tax.

Mr. Stephen McAdden: I very much hope that my hon. Friend the Financial Secretary will be impressed by the fact that every speaker so far who has addressed his mind to the argument advanced by my hon. Friend the Member for Handsworth (Sir E. Boyle) has supported the Amendment. The only discordant note has been struck by the hon. Member for South Ayrshire (Mr. Emrys Hughes), who did not apply his mind to the argument at all; he merely assumed my hon. Friend's motives as a fit subject for attack instead of applying himself to the arguments advanced. I think it is highly commendable that we should have such unanimity upon this important issue.

Mr. Emrys Hughes: We have not heard the Chancellor yet.

Mr. McAdden: I was referring to those who had spoken so far.
It is highly commendable that we should have this unanimity upon this important issue, because it is an important issue. The general arguments in favour of the craft industries were deployed at length some time ago and it would be most inopportune to go over the whole ground again, but it is important to disabuse our minds of some of the prejudice which the hon. Member for South Ayrshire sought to import into the debate. It is not true that the only people who wear fur coats are wealthy people. One has only to study some of the papers to which he himself contributes from time to time to find in the pages of those excellent periodicals advertisements for fur coats on hire

purchase; not for purchase by wealthy people, but by people of ordinary incomes.
Neither is the hon. Member right in assuming that there is not a miner's wife in the country who has got a fur coat. He really ought to get more up to date. Progressively over the years there has been a continual improvement in the standard of life of the people, and more and more things which used to be regarded as luxuries have now come to be regarded as necessities of life merely because in those early days production was not taxed as so-called luxuries are taxed today.
It is because my hon. Friend and myself are anxious that this range of commodities should be brought within the reach of the workers that we are opposed to this idea of taxation on what the hon. Member for South Ayrshire chooses to call luxury goods. We want more people to have them. For that reason I am delighted to support my hon. Friend in the argument he has advanced, and to express the hope that the Financial Secretary will realise that these industries are of considerable importance to this country from an export point of view. I know that it can be cleverly argued, "What is the use of talking about Purchase Tax in connection with export industries when no tax is paid on that which is exported?", but unless we manage to maintain a respectable amount of home trade we shall not have any exports.
My hon. Friend the Member for Billericay (Mr. Braine) referred to the export value of the fur trade. The fur industry has an export trade of £25 million which is very large for an industry of its size. We should remember that the fur trade was won for this country by the energy of its fur merchants. We won the fur market from Leipzig into this country, and Germany is most anxious to get it back. We shall assist Germany in her endeavours to win the fur market back from this country to Frankfurt unless we do something to try to preserve the industry which is contributing most substantially to our export revenue.
The same applies to the jewellery and silverware trade. I feel that we ought to do all that we can to assist these craft


industries not only for the employment which it gives to those engaged in them and whose employment we want to be able to protect and promote but also for the benefit of the export aspect of their trading. I advocate this argument from an impersonal point of view because there is, so far as I know, no silverware industry in my constituency nor any fur industry. I hope that in due time the hon. Member for South Ayrshire will remember that there are Members on both sides of the Committee who are prepared to advocate a cause in which they believe, and if it happens to be a constituency interest as well, so much the better. I hope that he will not in future seek to criticise hon. Members for espousing the cause of their constituents, especially when they happen to believe in it.

Mr. Victor Yates: There is a great deal of nonsense talked about what is luxury and what is not luxury and I think it is time that we had a more clear understanding of the matter. When we were previously debating the question of the jewellery industry in this House, I mentioned that in my judgment anything which brought culture to mankind was a necessity and not a luxury.
There is not an item which has been mentioned in this debate which cannot be proved to be a vital necessity to the nation. Most of the articles coming within this class come within the range of exports, and without a good home trade it is very difficult to have a good export trade. This talk about luxury trades is really absurd. I am surprised at my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) falling for that sort of thing. As a matter of fact, I thought we had converted him in a previous debate, because I can remember that in Birmingham, when the rearmament programme started, it was pointed out by some of us that this would have a detrimental effect upon the jewellery industry in the city. I should have thought that my hon. Friend would have thought that the less there is available for rearmament the better. I should have thought that he would have accepted the view that, with less Purchase Tax, less money would be available for rearmament.

Mr. Emrys Hughes: I may be converted again.

Mr. Yates: In relation not only to jewellery but to all the other items which come within the provisions, what disturbs me is the effect upon craftsmanship and skill. Whenever there have been impartial investigations into the effects of Purchase Tax upon, say, jewellery and silverware, we have had very clear advice about what really ought to be done. The Board of Trade Working Party on the jewellery industry said:
… we feel bound to emphasise that, viewed simply from the point of view of its effect on the health of the industry, the Purchase Tax has made a thoroughly bad start in the jewellery trade, especially in its impact upon fine jewellery and fine silverware; we do not see how the evil effects can be avoided except by the abolition of the tax.
The Parliamentary Secretary to the Board of Trade heard all the arguments that we brought forward on an earlier occasion. I am surprised that the Board of Trade cannot see the wisdom of the advice which has been tendered and that it continues a tax which is so heavy, so hard and so detrimental to the trade and which involves the risk of loss of craftsmanship and skill. Under the previous Government as well as this Government we have tried to influence the Board of Trade, but we do not seem to have moved it very far. It seems that Governments come and Governments go but the Board of Trade carries on the same as ever.
On an earlier occasion I quoted a letter from a manufacturer living in my constituency. He told me how he went abroad to obtain export orders. In Germany, two years ago, he found that 2,500 people were employed in making fashion-plate jewellery—the cheaper jewellery—and now the German industry has 21,000 workers. Do we not take these facts into consideration? I should have thought that the Board of Trade would have felt that our industry was being challenged in such a manner that notice should be taken of it. The industry which so many of us call a luxury industry is being encouraged in Germany by means of all kinds of incentives.
The craftsmen in this great industry of ours are gradually leaving, and they will not be replaced. Employers have told me about their difficulties. The same


sort of thing is happening in the glass industry. A firm of glass merchants and manufacturers in my constituency invited me to visit their factory. I was astonished to find how much was being produced, and I was also surprised by the difficulties under which they were labouring as the result of the heavy Purchase Tax. They have informed me that there has been for many years an apprenticeship scheme for each skilled operation in the trade, that in this way an adequate labour force has been maintained, but that due to recent unemployment the maintenance of this force is in jeopardy.
Then they go on to give me facts about employment in the past year. They say:
We have experienced short-time working varying between three and four days per week for over six months out of the last 12 months, and this, of course, does not take into account the kind of underemployment that takes place while men are retained on the premises. We also feel that as almost a part of the furniture industry we should be treated on a comparable basis.

Hon. Members: Hear, hear.

8.45 p.m.

Mr. Yates: My hon. Friend the Member for Liverpool, Scotland (Mr. Logan) agrees with that, and it is quite correct. If a dressing table is bought with a fixed mirror there is no Purchase Tax but if, in fact, there is a hanging mirror, which many would find easier for their purposes, there is an enormous Purchase Tax to be paid on it. Surely a mirror is a normal necessity. I support the hon. Member for Handsworth (Sir E. Boyle), who moved the Amendment, because I believe it is necessary that something should be done if this industry is to retain the craftsmen and skill which it now possesses, and not only this industry but others of a similar nature which have not been mentioned.
While I am grateful for what has been given, I think more should be done. My constituency is not wholly concerned with the jewellery trade. There is only a small section of the industry in it. It is spread over a much wider area, and is in the constituency of the hon. Member for Handsworth and also in that of my hon. Friend the Member for Aston (Mr. Wyatt). But I am disappointed that, after all the pressure we tried to exert as to the employment and the future of

the trade and the retention of the craftsmen, more was not done by a greater concession than has been given.
I hope that the Financial Secretary to the Treasury will be able to give us an assurance that consideration will be given to these vital facts and that discrimination will be afforded to this industry, so that we can be sure that what is now branded as a luxury will be found to be a vital necessity for our country.

Mr. Boyd-Carpenter: My hon. Friend the Member for Handsworth (Sir E. Boyle) is a most pertinacious and effective supporter of the needs of the group of industries with which this Amendment largely deals. Most hon. Members will remember the most effective way in which he raised this issue during the month of March, and I am certain it will not be any fault of his if the interests in particular of the jewellery and silverware industries are overlooked. I find myself in substantial agreement with a great deal of what he said in the course of what we all regarded as an admirable speech.
My hon. Friend indicated that he was not looking a gift horse in the mouth. I must remind him through you, Mr. Hopkin Morris, that this gift horse has the teeth in its mouth nicely reinforced with both gold and silver to the extent of 25 per cent. Therefore, it is a gift horse which it will well repay my hon. Friend to look in the mouth.
I agree entirely with the necessity for protecting the livelihood of those who work in these skilled crafts. Although the hon. Member for South Ayrshire (Mr. Emrys Hughes) was good enough to offer me his moral support, I find myself in difficulty in giving moral support to his arguments by way of reciprocity. I shall certainly not enter into the highly controversial subject as to what is or what is not a luxury. Suffice it to say, as I said on Second Reading, that no product is in that derogatory sense a luxury to the people who earn their living by producing it. Nor indeed, from a broad national point of view, is it possible to ignore the significant contribution to our export trade, and so to our balance of payments, which is made by the group of industries with which we are now concerned.
I do not seek in any way to dissent from the argument which was put effectively by my hon. Friend the Member for Billericay (Mr. Braine) to the effect that for such an export business there is a necessity for a sound and substantial home market. I can remind the Committee, however, that I am not merely in the position of agreeing in words with the arguments brought forward, but that those arguments have been met substantially by the proposal put forward by my right hon. Friend for a reduction by 25 per cent. in the rate of tax upon goods in this category. That is a substantial piece of evidence that we appreciate the force of the arguments and the considerations behind them which have been put forward in this debate.
The only issue which arises upon this Amendment is whether that reduction by no less than 25 per cent. of the rate of tax should be further increased by another 8⅓ per cent. reduction. It will perhaps set this debate a little in scale if I remind hon. Members that we have already gone three times the distance of the further step which we are asked to take. So I think it is possible for me to discuss the arguments of my hon. Friend and the arguments from the other side of the Committee on this point not on any broad dispute as to principle, nor indeed on any general considerations. All that this Amendment poses as a question is the precise degree of reduction which should be effective at the present moment. There are one or two considerations which I should like to put before hon. Members to assist them in making up their minds upon this comparatively narrow issue.
It struck me that one or two of the speeches made from the benches opposite —in particular that of the hon. Member for Ladywood (Mr. Yates)—seemed to ignore the fact that in this Finance Bill we are bringing forward proposals for a substantial reduction on these very things and that we have been criticised from their own Front Bench for doing just that. I assure the hon. Gentleman that, so far as we on this side of the Committee are concerned, we are giving what we think is full weight to the considerations which he put forward with so much force.
Now I must come back to the narrow issue which concerns the Committee, the

proposal for a further reduction, over and above the 25 per cent., of 8⅓ per cent. In discussing these matters, hon. Members like to know the cost of any proposal. The cost of the proposal of the hon. Baronet would be just under £2 million in the present year and about £3 million in a full year. That cost would, of course, be on top of the cost of £5⅔ million this year and £7 million in a full year which is involved by the 25 per cent. concession to which I have already referred. Therefore, the financial issues are not negligible, particularly in view both of the other demands which are from time to time suggested to my right hon. Friend in the course of our debates in Committee, and by reason also of the very argument which the hon. Baronet himself adduced when indicating that he thought my 'right hon. Friend had gone quite far enough by way of tax remission.
Another consideration which bears on this matter is that my hon. Friend's proposal would change the whole coherent pattern of my right hon. Friend's proposals for the Purchase Tax as a whole. I do not want to weary the Committee by going over the ground traversed during the debate on the previous Amendment, but hon. Members will be aware that, with the exception of one or two small adjustments which are made in the Schedule, the general pattern of my right hon. Friend's proposal is of a reduction of one-quarter in the Purchase Tax in the three main rates.
What the hon. Baronet now suggests is that in the case of the top rate a larger reduction, one of 33⅓ per cent., should be made. No doubt there is force in his argument that the need of industries taxed at a higher rate for relief from tax may be higher than that of industries taxed at a lower rate. His argument as to the difference between the rates was, perhaps, not a particularly strong one. He said that the result of the change proposed in the Bill would be to leave still the same proportionate difference between the rates. That is true, but what concerns the taxpayer is not the proportionate difference, but the absolute amount of tax that he has to pay.
Of course, the effect of my right hon. Friend's proposals taken as a whole is that the difference in tax between the second and the top rates will now be 25 per cent. as opposed to the previous


existing difference of 33⅓ per cent. Therefore, from the point of view of the consideration which my hon. Friend quoted from my right hon. Friend's speech—the consideration of the groups of tax not being too far apart—I do not think there is very much force in his ingenious argument as to the proportions. The major consideration which hon. Members will bear in mind is that this is all part and parcel of a coherent set of proposals for dealing with the main structure of this tax; and it would take very powerful considerations indeed to justify departing from them solely in connection with the highest level.
What we must not totally ignore is the position of the retailers. I listened with interest to what my hon. Friend the Member for Cheadle (Mr. Shepherd) said about the inquiries that had been made of the retailers in connection with the silver trade. On the other hand, one must bear in mind the considerations which arise—and which, as hon. Members will recall, the Hutton Committee recommended should, among other things, be dealt with, securing that reductions in Purchase Tax were of a moderate nature—of the repercussions of too large a decrease in tax at one time.
There is this further practical consideration. The tax was reduced as from 15th April, the day after the Budget, to 75 per cent. I do not want to labour the argument, but clearly there would be considerable difficulty if shortly afterwards a further reduction were made. Even accepting as a matter of hypothesis for this argument that 66⅔rds per cent. would originally have been better than 75 per cent. I think hon. Members will see the force of the consideration that two changes so close together are extremely bad, both from a wholesale and from a retail point of view.

9.0 p.m.

Mr. R. E. Winterbottom: Would the hon. Gentleman agree that that point of the difference in the reduction from 25 per cent. to 33⅓ per cent. has now been taken into consideration by the retail trader and yet, after taking it into consideration, in almost every case an increase in the reduction has been recommended? In other words, the main consideration of the retailer is as great a reduction in the

tax as quickly as possible, irrespective of the loss in so far as the stock is concerned?

Mr. Boyd-Carpenter: That is not the view expressed by a great many of the retail organisations, but I do not wish to anticipate a debate which may take place at a later stage. I wish to make clear that not only the size but the rapidity of changes of this sort is a matter which quite clearly my right hon. Friend has to bear in mind in choosing what is the right thing to do in the circumstances.
I was interested in what my hon. Friends said in particular reference to the silver trade. As they rightly said, this is a craft industry with ancient skills and a very high tradition in this country. It is a trade of which all hon. Members are proud. I would suggest to my hon. Friends that the reductions my right hon. Friend has made will be of very real value to that trade, as it will be to other trades. They have been made so recently that it is perhaps a little unsound to argue already that they are insufficient. This, in fact, is the first time since 1943 that the rate of tax on silver has been under 100 per cent. There was an epic period of some months under the regime of hon. Members opposite when it soared to 125 per cent. Since 15th April, for the first time for 10 years, it has been below 100 per cent.
I suggest to my hon. Friends, as well as to hon. Members opposite, that before coming to a hasty conclusion which cannot be founded on sufficient experience of the lower rate, the sensible thing is to watch the effect of this change and see whether the gloomy forecasts which one or two hon. Members were inclined to make may or may not be realised. We have given to this industry, as to the other industries in this sphere, the renewed stimulus of knowing that for the first time for some years their rate of tax has come below the 100 per cent. level. I am sure that will be some considerable encouragement to them psychologically. I hope and believe it will be of some substantial assistance to them from many points of view.

Mr. Logan: If the hon. Gentleman talks much longer, they will think they have got a benefit.

Mr. Boyd-Carpenter: I very much appreciate the graceful compliment the hon. Member has paid me, but I must not fall into temptation and be tempted by him into prolixity. I must therefore put the vision of that compliment behind me.
This seems to be the common sense of the matter. We have made the reduction as from 15th April, and I think it has been generously acknowledged to be substantial. Those concerned with the effect of the 100 per cent. rate upon these industries must feel they have reason to appreciate the importance and significance of this change, which is very real and substantial. We believe it will be of assistance.
Of course, at this stage of the Bill I cannot anticipate the future, but those concerned in these industries will appreciate that my right hon. Friend does not accept the view expressed from time to time in other quarters that, because these industries produce so-called luxuries, little or no help should be given them. He has shown, not by words but by deeds, his care and concern for the future of these industries. The wise thing, as this is part and parcel of constructive proposals for reduction of the Purchase Tax, is to allow the matter to remain as proposed in the Bill and see that improvements result from the changes which were effected just under two months ago.

Sir E. Boyle: I have listened with close attention to what the Financial Secretary has had to say. In view of the arguments which he has advanced, I beg to ask leave to withdraw the Amendment.

Hon. Members: No.

Amendment negatived.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. Mulley: On this matter, as on many others, the Chancellor of the Exchequer reminds me of King Canute. He sits in a very thoughtful but rather pessimistic way on the Front Bench as though he sees the economic tides coming towards him and feels that there is nothing he can do about it, except, of course, to send up the Financial Secretary, bobbing like a cork on the water. In his last speech the hon. Gentleman was more often under the water than above it, but, generally speaking, he manages to make a brave show against those economic forces.
Purchase Tax in the hands of a wise Chancellor could be used to harness the economic tides with which the Chancellor must necessarily contend. I would also point out that while the Chancellor usually tells us that everything is against him, in the terms of trade and one or two other very important matters he has had the advantage of very favourable tides during his period of office.
We have some sympathy with the Chancellor in his task of dealing with the question of Purchase Tax. Clearly, he needs the money for Government expenditure which we on this side of the Committee broadly endorse. If he had come along and said, "I cannot reduce Purchase Tax because I need the money for important and necessary Government expenditure," I think we should have heard him with great sympathy. He has not done that. He has made concessions, rightly in some directions, in taxation.
Our contention is that, in the phrase of Mr. Gladstone, he has squandered a surplus. I am sure that that very distinguished predecessor of the Chancellor has turned in his grave at the way in which the Chancellor has refused to cut the cost of administration by getting rid of a tax when he could have done so and has instead contented himself by reducing taxes by little bits. Purchase Tax has its administrative difficulties. I can best illustrate that point by referring to the industry I know best, the cutlery industry. A pair of scissors over 8 inches in length is tax free; a pair less than 8 inches long attracts tax at the rate of 25 per cent. Both pairs can be put into a box which, empty, is taxed at 50 per cent. and when all three items are together the set is taxed at 75 per cent. of the value of all the articles involved in it.
It is clear that any tax of this sort will present administrative problems. The Chancellor could have eased those problems by removing tax from some articles altogether and compensating himself from the revenue aspect by leaving other items at the rate of tax which they attracted before the Budget.
We should make it clear, when considering this Clause, that there is nothing really wrong in the principle of using Purchase Tax as a weapon of economic planning, used as it was intended to be used by Sir Stafford Cripps and my right


hon. Friend the Member for Leeds, South (Mr. Gaitskell). We had an extraordinary version of economic doctrine in an earlier speech by the Economic Secretary. He said, for example, that if anyone ever thought the party opposite was interested in planning so far as planning the details of a particular industry was concerned, they were wrong. The party opposite had not abandoned that principle, they had never held it. That, I think, was his phrase.
Are we to infer that the Government, or the Economic Secretary, or the Chancellor are not interested in the number of cars exported by the motor industry in the present year? How can we expect to achieve economic solvency in the face of that sort of attitude on the part of Treasury Ministers? Surely, it is the most extraordinary economic doctrine which has been ventilated since the war.
Obviously, in certain cases, and I think the motor industry is an excellent example, there is a lot to be said for Purchase Tax to restrict home consumption when a commodity does not easily lend itself to rationing. There are other export articles upon which it would be expedient to put a financial disincentive when physical control is not entirely practicable or effective. That would obtain not only in the field of exports but in regard to investment, and in the field of defence.
Does the Economic Secretary really mean to say, if there was no other means than financial disincentives to prevent resources going into home consumption which he wanted for defence, that there would be no detailed interference with an industry? That is a most astonishing doctrine which I hope the Chancellor will repudiate.
The Chancellor did not say, "I have no Purchase Tax reductions to make because I have no money." He said, "I really do not like Purchase Tax"—that we could infer—"but I cannot do much about it, except to make a 25 per cent. reduction all round." But he did choose to make special exceptions. Both today and on other occasions the Financial Secretary has been busily pointing out the difficulty of making selections. The principle of non-discrimination has been freely ventilated by hon. Members opposite.

But that has been denied not by words but by the deeds of the Chancellor himself, because, in the Budget and in the Finance Bill, there are, in fact, these discriminations.
Dry batteries and taxis have been exempted from tax, and we agree that is a very good and proper thing to do. We are not so sure about pianos. Reductions in tax have been made on the same kind of argument which were advanced by hon. Gentlemen on both sides of the Committee in regard to other craft industries. The exemption relating to umbrellas is more surprising. We have not heard the case argued for that. I can only conclude that it is a form of hidden subsidy to bookmakers, because they will be one of the more important beneficiaries.
I hope that we shall be given an explanation of the extraordinary treatment accorded a number of articles in Group 29, called fancy and ornamental articles. I thought this concession was a small one involving very little money. But on putting the question to the Financial Secretary, I was told that it is costing £1,200,000 in a full year. It is difficult for those of us who represent workers in craft industries to explain to the silversmiths and cutlers of Sheffield and other craftsmen why feather haloes are subject to a 50 per cent. reduction in this Budget, whereas their products are subject to only a 25 per cent. reduction.
I do not know why feather haloes were selected. I can only think that the Chancellor had in mind the words of one of his hon. Friends who talked about the straws in the Chancellor's hair. Now that the Chancellor has announced that he is doing away with the Excess Profits Levy perhaps he feels that in the meetings upstairs he should wear a halo. I would point out that in choosing a feather halo he is choosing one that is very easily blown off.
9.15 p.m.
Clearly, one cannot cover the whole range of articles which have been exempted from tax. By reference to cutlery I want to illustrate the point that the Chancellor should have chosen some articles of essential use and exempted them completely, thereby reducing the cost of living and the cost of the administration of the Revenue and the Customs and Excise. We had an extraordinary


exposition by the Economic Secretary on the subject of amenities and essentials this afternoon. Perhaps I could best convince him that a knife, fork and spoon are articles of essential use and not merely amenities by telling him that when I was taken prisoner of war my hosts, the Germans, who did not by any means give us a luxurious standard of living, did issue us with a knife, fork and spoon.
In other ways I agree with him that the standard we had was so austere as generally to fit in with his view of what is a necessity. As a small concession to his point of view I would say that the fork was not absolutely necessary when our basic diet was a bowl of soup and one-fifth of a loaf of bread. In the most primitive conditions a knife is essential. If the hon. Gentleman had been required to cut a loaf into five pieces when, by the rules of the game, the man cutting it had the last choice of a piece, he would have wanted a good sharp knife. I hope that he will take back to the Treasury a different view of the character of a knife and fork and spoon than that which apparently is held there.
I ask the Chancellor to see whether he cannot exempt these articles from tax. Employment in the cutlery industry is causing difficulty. Many firms have made cuts amounting to 75 per cent. in their labour force, and this at a time when there is a certain amount of fortuitous additional work through the orders for Coronation souvenirs and the like. When the Coronation special work is over the employment situation in both the cutlery and the silver trades will be most desperate. I hope that the Chancellor will at least undertake to look again at this position.
The argument may be advanced that in putting forward suggestions for a reduction in tax and for the complete exemption of certain articles we are taking a Utopian point of view and that the Treasury must have its Revenue. I would point out to the Chancellor that he could have made all the sensible modifications in Purchase Tax that the economy required by leaving as it was the rate of tax on motor cars and televisions, just to mention the two most obvious items. It can be argued that it is desirable to stimulate production and demand in those industries. The Chancellor could have

caused this stimulation much more easily, much more effectively and certainly from the Treasury point of view much more cheaply if he had amended his hire purchase regulations instead of reducing Purchase Tax.
If he had any acquaintance with the ways of working people and those who might be on the margin between buying a motor car or a television set or not, the right hon. Gentleman would know that the initial deposit and the terms of the present hire purchase regulations are much more restrictive than the existing rate of tax. I hope that even at this late stage the right hon. Gentleman might have second thoughts on this matter.
I do not need to go at length into the arguments at the other end of the scale about the special case of the craft industry. That case has already been argued. I am sorry that the Chancellor was not here at the time to listen to the hon. Member for Handsworth (Sir E. Boyle), the hon. Member for Cheadle (Mr. Shepherd) and other hon. Gentlemen opposite as well as some of my hon. Friends on this side of the Committee. Those in the silverware industry in Sheffield are pleased to know that they are always given sympathetic mention by Government spokesmen in discussions on this subject. But I would say frankly that the 25 per cent. reduction from 100 per cent. to 75 per cent. is of absolutely no help at all to the industry. It may be argued that it is too early to know, but I should prefer to take the view of the silversmiths of Sheffield against that of the Treasury expert on the effect of an alteration of tax on their products and whether it will make very much difference or not.
I should also like to say that one of the difficulties about an all-round reduction of tax is that the products of these industries are in the same competitive position with the products of other industries as they were before. If there had been a 25 per cent. cut of the tax on silverware, and not on pianos, radio sets, television receivers and so on, it might have been argued that it would attract additional custom from people in the position of having to buy wedding presents.
They can buy a radiogram and pay only 50 per cent. tax, they can buy a


piano and pay no tax at all, but, if they want to buy a silver teapot, a very handsome and appropriate wedding present, they will find that it attracts a 75 per cent. tax. I wish the Chancellor had been able to visit the excellent exhibition held in Sheffield of contemporary silverware alongside the great trophies of the Sheffield Cutlers' Company, because he would have realised the great importance of retaining the skill of these craftsmen.
There is another small point which, in the words of the Financial Secretary in a Written answer, would involve negligible cost, and which concerns the alleviation of the exceptionally hard treatment of mother-of-pearl. The mere addition of a piece of mother-of-pearl, worth perhaps only 4d. or 5d. itself, to an article of silverware—and this is often done, because it is a matter of using up spare or waste products—may mean that something which would otherwise be exempt from tax would be brought within the 75 per cent. rate. While that may not be a matter of very great consequence to the Chancellor, it is of the utmost importance to the skilled craftsmen who work in the industry. There is the further point that, whether it is a good thing or not, it is the fact that the American market is interested in knives and spoons with mother-of-pearl attachments, but, because it is impossible to sell any mother-of-pearl on the home market, the cost is very much higher and the price very much less competitive than would otherwise be the case.
Finally, on the question of the silver and mother-of-pearl industries, I would make a special plea that the Chancellor should look again at this matter. The case has been put by some of his hon. Friends behind him and also by responsible people in the trade, and this is one of the few industries where, perhaps, there would be no special difficulty about a reduction in the tax as far as the retailers are concerned. I agree with hon. Members on both sides of the Committee who have said that some, though not all, of these articles which are subject to the 75 per cent. tax cannot be classed as luxuries, and that we should aim to give ordinary people a greater opportunity to acquire them. In many cases, a few silver spoons or a silver cakestand are the really prized items which one finds in a working-class family, and this industry

will not continue unless special consideration is given to it.
I therefore reinforce the arguments advanced that silver articles, and, in particular, silver tableware, should be placed in Clause 11 and not in the Clause under which they will attract the 75 per cent, rate of tax. I have myself put down Amendments to the Schedule for this purpose, but I fear that they will not be in order unless the Chancellor is good enough to add his own name to them, and I hope that, before we discuss the Schedule, the right hon. Gentleman may consider doing that. I am disappointed that the Parliamentary Secretary to the Board of Trade is no longer with us because the Board of Trade have a special responsibility for both the cutlery and silverware industries, and they could, perhaps, give the Chancellor more official information as to employment and other aspects of these industries and thereby provide him with a second opinion about it.
I wish to make a general point about the problems of retailers in regard to Purchase Tax. I agree that this matter will be discussed in greater detail at a later stage, but I would point out to the Chancellor that I do not know of any retailer or any association of retailers that is not against Purchase Tax or in favour of its reduction. Retailers have been bombarding Members of Parliament for years on the subject. I ask the Chancellor to have the courage to say to them, "You have asked me to reduce the tax, and it is no good your screaming now and saying it is too expensive for you." If the retailers want the tax reduced, they must face the temporary difficulties which it may create. Certainly, as regards silver and cutlery, that would be a wise line to take.
Finally, I would ask the Chancellor to make use of subsection (2) of this Clause. It gives the right hon. Gentleman greater power to introduce Amendments, not only in connection with articles, but also as regards rates of tax. Subsection (2) is the most encouraging part of this Clause, and I hope it will be used. I also hope that the Chancellor will disregard that part of the Hutton Committee's Report in which they say that it is a bad thing to alter or vary the rates of Purchase Tax during the financial year. On the contrary, to save everything up to the Budget


has a most disastrous effect on the trades concerned because they do practically no business at all from the middle of November till after the Budget, whether or not a reduction in the tax is made.
I am sure that the difficulties which faced the motor industry at the beginning of this year were due not to the rate of tax, but to the probability that some reduction would be made in it. I ask the Chancellor to be bold in making these alterations, and, I hope, exemptions, during the financial year. Subsection (2) of the Clause is the most valuable contribution which the Chancellor has made this year in regard to Purchase Tax.

Mr. Frederic Harris: I hope that the hon. Member for Sheffield, Park (Mr. Mulley) will not mind if I do not follow him in the specific arguments he has put forward, but he made a brief reference to the subject which I wish to raise, namely, the question of tax relief for tax-paid stocks.
I know that there is a new Clause down in the name of the hon. Lady the Member for Blackburn, East (Mrs. Castle) but I presume that it is not necessarily certain that it will automatically be called. If it were not, I gather that we should not have the opportunity of discussing what to me and to many of my hon. Friends is a very important matter. Therefore, I trust that I shall be in order in referring to this matter on the Motion, "That the Clause stand part of the Bill."

The Temporary Chairman (Sir Austin Hudson): I think the hon. Member had better wait until we come to the new Clause. It does not really arise on this Clause.

Mr. Harris: May I respectfully put it to you, Sir Austin, that the question of the reduction of Purchase Tax automatically causes this problem to arise. I have made inquiries in the matter, and there seems to be considerable doubt whether the new Clause will be selected. It would be extremely unfortunate if we were not given the opportunity to raise the matter at a later stage, and, therefore, I presume it is in order to raise it now.

The Temporary Chairman: I do not think it could be raised now. I do not know, of course, what Clauses will be selected, but the new Clause to which the

hon. Member refers seems to have created a good deal of interest in the country, and I should be very surprised if it were not selected.

Mr. Harris: I am very sorry, Sir Austin, to press this point, but, as I have said, I have made inquiries and I understand that it is by no means certain that the new Clause will be selected. In that case, it would seem that the only opportunity of raising the point about the relief of tax on retailers' stocks would arise on Clause 9. How can we be sure that we shall be able to raise it later?

9.30 p.m.

Mr. Gaitskell: It seems in order to discuss this matter now. If we knew there was to be a further debate, none of us would wish to raise the matter now, but we do not know that at the moment. The Clause we are discussing involves the reduction in Purchase Tax which gives rise to all this difficulty. I should have thought it was in order for hon. Gentlemen to raise this matter.

The Temporary Chairman: I am in some difficulty. If the whole matter is debated now, I should think it extremely unlikely that the Chairman of Ways and Means would select the proposed new Clause on which to debate it all over again, but if the Committee wish to discuss the whole thing now, I could not rule them out of order on the matter.

Mr. Harris: My inquiries did not make it absolutely certain that the proposed new Clause would be called, and in that event we would lose every opportunity of raising this matter, which is too vital to my constituents to be allowed to go past. If we discuss the matter now, it may mean that the subsequent debate will be out of order. If I may, I will proceed to speak on this Clause.

The Chancellor of the Exchequer (Mr. R. A. Butler): Experience on the Bill so far has been of a very considerable degree of agreeable and understandable repetition. It is always the case on a Finance Bill, but if we are to have a debate now and a similar debate later, it simply means that the Committee will have to sit very late, and perhaps all night, in order to finish the Bill. The Government do not want to sit late, largely because of the effect upon the servants of the House, and so forth. We


ought to be quite clear, Sir Austin, whether this matter is to be raised now or later. We cannot afford a repetition of debate as we had on football, and may have on other subjects.

The Temporary Chairman: I am not the Chairman of Ways and Means, but it is extremely unlikely that he would call the proposed new Clause if the subject had already been debated at some length on the Motion now before the Committee.

Mr. Gaitskell: I was only drawing attention to the fact that on the face of it a discussion now seemed to be in order. I entirely agree with the Chancellor that if we are to have a debate later on it will be far better to defer this matter until then. In view of what you said, my hon. Friends feel that you gave a broad hint that the proposed new Clause was likely to be called, but if the Chancellor could give us an assurance—supposing that that did not happen—that the Government would somehow or other find time to discuss the matter, we could proceed. I am sure that he will agree with me that it is important that this matter should be discussed.

Mr. Harris: I only want to discuss this thing once but my inquiries showed some doubt whether the proposed new Clause would be called. In fairness, even to the hon. Lady the Member for Blackburn, East (Mrs. Castle), we ought to consider the possibility that it will not be selected. If, however, there is a reasonable likelihood that we can debate the matter later, that is a different situation. If there is some doubt, we should proceed with the matter now.

The Temporary Chairman: My advice to the Committee would be not to pursue the matter now, although I cannot say that the proposed new Clause would be called. There may also be another opportunity later on. There is another stage, and if a Motion were put down to leave out the Clause in order to discuss it, I cannot see that the Chair could refuse it. Nobody can pledge the Chair in advance, but we have common sense in this Committee and I feel sure that an opportunity will be found to debate the matter at a time other than now.

Mr. Percy Shurmer: We have had a debate on the reduction of Purchase Tax on many articles. The matter has been well debated and I agree with some of the proposals that have been put forward. I hope, Sir Austin, you will not rule me out of order, because the Chairman told me I should be in order when I explained to him what I was going to talk about. I have to give some idea of what I wanted to say in order to be sure that I should be in order.
I hope the Chancellor will not think I am taking a very drastic line of action, but I think the time has arrived when some inquiry should be held into the whole method of imposing Purchase Tax. It has got into complete chaos, and I have some examples to show the Chancellor how the position has arisen. The officials at the Customs and Excise office, when they get a list of articles from which they have to choose some on which to impose Purchase Tax, must close their eyes, stick a pin into the list and say, "This shall be 100 per cent. Purchase Tax, this 75 per cent., this 50 per cent., this 25 per cent., and this tax-free."
The number of anomalies in the different groups of Purchase Tax is enormous and is increasing daily. It causes a great deal of dislocation in production, and a lot of time is spent by individuals, by firms, by trade associations and by Purchase Tax officials in correspondence and interviews in a fruitless endeavour to evolve some sort of order out of chaos.
I hold in my hand a figure of a dog with a corkscrew attached to its tail. Strange to say, if the manufacturers were prepared to put that corkscrew on the back of the dog or on the stomach of the dog, the Purchase Tax would be 25 per cent. How ridiculous!

Lieut.-Colonel Marcus Lipton: What is the present rate of Purchase Tax?

Mr. Shurmer: The present rate of Purchase Tax is 75 per cent. because the corkscrew is run out of the tail of the dog.
I also have with me, as hon. Members can see, a chamois leather made by a firm in Birmingham. Pieces are cut off and thread through string, but if it is


used on a window or a car for half-a-dozen times the water breaks the string and the thing is of no further use. The Purchase Tax on that is 25 per cent. The same firm can take the pieces of spare chamois leather, stitch them together and make a nice square piece, which can be used for months, and that is subject to no Purchase Tax.
The Purchase Tax on a brush and comb toilet set is 33⅓ per cent., but on a brush and comb with a hand mirror it is 100 per cent. A barometer in the form of a ship's wheel attracts 100 per cent. Purchase Tax, but if the wheel spokes are shorter than their width, it is tax-free. A shopping bag with an open top is tax-free, but exactly the same bag with a cord through the top to prevent the woman upsetting the things out in the street, or to prevent somebody putting his hand in her bag, bears 66⅔ per cent. Purchase Tax. The whole thing is absolutely monstrous and is causing chaos in industry.
Let us for a moment look back at the Coronation period. One of my colleagues and myself had to go to see the Financial Secretary because a whole industry making pencils had been told that instead of imprinting a crown on the article they should make a small brass crown to put on the top, and immediately they did so the article became subject to 100 per cent. Purchase Tax. As a result, the whole industry was in chaos, and had it not been for the intervention of the Chancellor, for which I thank him very much, thousands of pounds' worth of work would have had to be scrapped.
Then there is the question of mirrors. My hon. Friend the Member for Lady-wood (Mr. Yates) and my hon. Friend the Member for Liverpool, Scotland (Mr. Logan) mentioned mirrors. I agree that there are mirrors with fancy frames and that they may be luxuries, but at the present time there is 75 per cent. Purchase Tax on mirrors which are ordinary household articles. It is not my intention to keep the Committee longer, but I say that the whole industry is in chaos owing to the attitude taken by the Customs and Excise officials in the way in which they place this tax, and the sooner the Chancellor has an inquiry into the whole matter to clear up these anomalies, the better.

Mr. Fletcher-Cooke: Does the hon. Gentleman agree that, in spite of the examples which he has given, Purchase Tax is an admirable weapon for economic planning?

Mr. Shurmer: I am not going to be drawn into that argument. I am arguing about the anomalies of Purchase Tax. At the present time manufacturers have to deal with correspondence and make inquiries of officials in the Customs and Excise office because they do not know whether the products which they are manufacturing are to have 100 per cent., 75 per cent. or no Purchase Tax at all. I appeal to the Chancellor to have an inquiry into the whole of these anomalies so that industry may have a chance of knowing what articles will bear Purchase Tax before they are put into manufacture. The dog with a corkscrew on its tail is an example; it has a 75 per cent, tax, but if the corkscrew is put on its back or its belly, then the tax is 25 per cent.

Mr. F. M. Bennett: I should like to take up one point made by the hon. Member for Sparkbrook (Mr. Shurmer) during his rigorous inquiry into these anomalies. He mentioned the mirror industry. During the preceding debate the Chancellor was not here and it was replied to by the Financial Secretary. Members on both sides of the Committee then broached this matter of mirrors as well as silverware and jewellery. In his reply, the Financial Secretary said that he could not go any further at this stage in considering any further reductions in tax, but he gave a specific assurance that in the case of both the jewellery and silverware craft trades, the position would be carefully looked at in view of certain obvious fears about conditions at the moment in those industries. I should now like to ask the Chancellor whether that assurance which was given also referred to the mirror and glass processing industry. If it did, I am content to accept that assurance.

Mr. Charles Royle: While it is a fact that this Clause deals with the whole incidence of Purchase Tax I hope the Committee will allow me to go back to an earlier debate today and make some further references to the question of textiles. I do not apologise for doing so because in spite of the general


debate which took place on the question of textiles I hope, in the course of my remarks, to raise some entirely new points in regard to it.
For the purpose of finding a test for what I want to say in a short time, I would refer the Chancellor of the Exchequer to the Report of the Douglas Committee on Purchase Tax and to paragraph 55 of that Report, which states:
The high price of expensive non-utility goods does not necessarily make them any less essential than utility goods. In many cases it is due primarily to better materials and workmanship which may make them better value for money than cheaper and less durable goods. The evidence submitted to the Committee has satisfied us that the effect of the present tax is to make such non-utility goods excessively dear in relation to the best qualities of tax-free utility articles, although we realise that other factors, such as a re-distribution of income, may also have contributed to the fall in the demand for the more expensive grades. We have been told, for example, that home market sales of textiles made from West Indian Sea Island cotton and from silk have fallen to such a low level that the outlook of these industries, if the present taxation arrangements continue, is very serious indeed.
9.45 p.m.
We have had some revision of that as a result of the last Budget and Finance Act, but the recommendations of the Douglas Committee brought not relief at all to that type of industry. The hon. Member for Darwen (Mr. Fletcher-Cooke) spoke about the outlook of the Opposition towards high grade textiles; it may surprise him to know that we are very concerned about the future of high grade textiles. We have never regarded velvet as a luxury article. Our aim throughout has been that the lower income groups should have every opportunity of purchasing the best commodities available, just as do those in the higher income groups.

Mr. Fletcher-Cooke: I am much obliged to the hon. Member for that reference. Can be explain why velvet is not a luxury whereas fur is?

Mr. Royle: I can explain that straightaway. My discrimination would be on the basis of the original value. Velvet is not a high-priced article in the way that fur is. There is real reason to discriminate, at this stage at all events, between the two.
I want to argue in two ways about Sea Island cotton. I do so for two reasons, first, because I represent a textile area,

and, secondly, because of a visit which the hon. Member for Bodmin (Mr. D. Marshall) and I paid, as a Parliamentary delegation, to the Leeward Islands this year. From what I have seen of Sea Island cotton in the Lancashire textile works and of the growing of the cotton, I appreciate the tremendous difficulty.
Sea Island cotton is one of our most desirable textiles. It is of the highest possible quality. It is claimed to be the finest cotton produced in the world. Its long wearing quality is well known to everyone. It is unrivalled for length, strength and fineness and it can be spun in the highest counts produced. But it is very dear to buy, and that is largely because of Purchase Tax, for it attracts a rate of 50 per cent. in the present Bill, The Purchase Tax puts it outside the range of pockets which are not very deep. I want this very desirable commodity available to all our people, and it can very largely be done by a reduction in Purchase Tax.
The Committee will remember the last speech of my late right hon. Friend, Mr. George Tomlinson, from the Despatch Box. We were discussing textiles and the price of textiles generally. He reminded us that for very many years he actually worked in a cotton mill in the town in which he was born, and he worked on Sea Island cotton during the whole of that time. Only when he became a Cabinet Minister and, as a representative of His Majesty's Government, paid a visit to New York was he able to afford to purchase Sea Island garments that he had been making all his life. That is the basis of my argument.
Sea Island cottons come under the definition of a B class material under the D Scheme and that rates the Purchase Tax accordingly. At present, the D figure for men's shirts is 17s. 6d., yet Sea Island cotton shirting materials attracts tax at 23d. per yard or upwards. On some other Sea Island fabrics for ladies' dresses the rate of tax is as high as 77d. a yard. If that fabric is to be sold to the makers or to the public, the price must be greatly reduced, and it can only be done by the reduction of Purchase Tax. At this moment the Raw Cotton Commission holds very large stocks of this most valuable commodity. It is estimated that in 1950 the total consumption of this cotton was 1,600 bales against a production of


6,000 bales, and since that year the position has steadily deteriorated. There is no reason to doubt that the position could immediately be rectified by some attention to Purchase Tax.
I might anticipate the Treasury's reply to my remarks that they could not possibly afford to abolish Purchase Tax on this fabric or on the clothing made from it by stating here and now that they are not collecting any tax at all. There is actually no sale of Sea Island commodities at this time.
May I refer briefly to the other side of the matter. The hon. Member for Bodmin and I spent many days in the Leeward Islands and we visited the islands of Antigua and Montserrat, where this wonderful cotton is growing. The superfine quality is grown only in St. Vincent and in the Barbados, which is a unique production. I want to stress that the inhabitants of these islands are almost entirely dependent upon this production for their living and are very worried at the present time. Smallholding production predominates over the large estates in those islands, and in every island in the Leewards the population is dependent to a larger or lesser degree upon the production.
There is a real danger of the collapse of the industry, and that would entail assistance from Her Majesty's Government to enable the Colonies to balance their finances and would mean grants-in-aid. It is to the advantage of the Colonies as well as to the Treasury that some aid should be given along the lines I have suggested. I can assure the Chancellor that there is a grave risk of a complete collapse if he fails to do anything about it.
The industry began in 1902 and down to 1920 the demand was good. Then fashions changed and there was a fall in demand, but action was taken to manufacture different goods from the fibre and there was a real recovery. There was a peak year in 1939 with 6,400 bales and during the war all this crop was commandeered for making parachutes and the like, which shows the great value of Sea Island cotton to us. Immediately after the war difficulties were not experienced because the crop was purchased by the Raw Cotton Commission in advance at remunerative

prices. Recently, however, the action of the Government in allowing spinners to contract out of obtaining their supplies through the Commission has changed the position and there is now real danger from accumulating stocks. I am, therefore, genuinely appealing for action.
Employment at home is involved as well as employment in the West Indies. It is no exaggeration to say that the entire economy of these West Indian islands is in danger. The living standards of the local people are in grave jeopardy. Years of work in research and planting and development may go. This fabric is also faced with the competition of the new synthetics and needs more encouragement. My appeal to the Chancellor is a dual one: help for the manufacturing side at home and a guarantee of livelihood for the local people in the West Indies.
This is a piece of Colonial policy well worth undertaking and in the name of the Commonwealth I ask the Chancellor to take action so that a most desirable material may become available to many more of our people. I am well aware that we are past the Amendment stage, but there is a further stage in this Bill, and I appeal strongly to the right hon. Gentleman to give serious consideration to the well-being of people in my part of the country as well as to the people in the West Indies before we reach the Report stage.

Mr. H. A. Price: I propose to keep the Committee no more than five minutes in pressing the claims of two groups of goods for more consideration from the Chancellor than they have so far received. The first consists of those articles which have become known as "skidlids"—safety helmets for motor cyclists and cyclists.
Quite rightly miners' safety helmets are exempt from Purchase Tax, but motor cyclists' helmets bear that tax. Some hon. Members may have noticed in the Press only two or three days ago that a coroner, presiding over an inquest upon a motor cyclist who had been killed, suggested that the wearing of "skidlids" should be made compulsory. I do not go so far as that because I prefer to avoid compulsion where possible, but I urge upon the Chancellor the advisability of using


encouragement. We ought not to discourage the use of life-saving apparatus by imposing Purchase Tax on it. The cost to the Exchequer would be quite small.
My second point deals with a class of goods which has been the subject of correspondence between myself and the Treasury for 12 months. I am not complaining about that. I have learned that one has to fight the Treasury for a long time to gain one's case and I am quite prepared to go on doing so, but here is an opportunity to press my case which I cannot let slip. It is the claim of asbestos clothing. Asbestos is, strangely enough, a woven cloth, and because of that suffers under Purchase Tax and the D Scheme. For example, gloves made of asbestos enjoy a very much less favourable position under the D Scheme than gloves made of rubber or leather. No one would suggest that anybody would wear a pair of asbestos gloves for adornment. They are worn for safety. They are industrial garments and as such are entitled to a favoured position.
10.0 p.m.
When I have submitted this proposal to the Treasury, they have replied that it was not possible to discriminate in favour of asbestos in this way. That argument, however, does not hold water, because the Treasury already discriminate in favour of asbestos as far as aprons are concerned. Aprons of leather, rubber or asbestos enjoy a favoured position as compared with other aprons. I have heard my hon. Friend the Financial Secretary to the Treasury support some very thin arguments with great force and vigour, but I do not think he can do much with this one. At any rate, I invite him to try.
May I submit one other argument. A furnaceman who wears an asbestos finger stall to protect his finger has to pay Purchase Tax. If, as a result, he decides not to buy an asbesos finger stall and burns his finger, he is able to buy a rubber finger stall to cure it without paying Purchase Tax. Surely, it would be very much better to encourage the use of the preventative rather than the use of the curative. I hope that the Treasury will give my suggestions sympathetic consideration.

Mr. Anthony Crosland: Most of the speeches on this Clause today have, naturally enough, concerned particular items which bear Purchase Tax, and I should like to speak rather more generally on the question of the tax as a whole. With one or two striking exceptions. Purchase Tax has had practically no friends in the Committee today. A number of hon. Members have pointed out numerous anomalies, and so on. and these have been appreciated on both sides. Attention has been drawn to the alleged deterioration in quality that takes place, with its possible bad effect on exports, and to all the well-known problems that arise, and have always arisen, in respect of this tax.
I do not doubt that many of these weaknesses exist and that the problems are serious ones, but it is about time that somebody pointed out that there were positive arguments in favour of Purchase Tax as a method of taxation. The first thing, to which hardly anyone has drawn attention, is that Purchase Tax can be an effective weapon for increasing exports. We have constantly had instances of this over the last few years.

Mr. N. H. Lever: Where?

Mr. Crosland: The significance of my hon. Friend's interruption completely escapes me.

Mr. Lever: My hon. Friend says that over the last few years we have had examples of Purchase Tax increasing exports. I should like him to tell us where we have had those examples.

Mr. Crosland: Had my hon. Friend given me about 30 seconds more, I should have hoped to have given him one or two examples. I should have thought that in such cases as motor cars, commercial vehicles, refrigerators, washing machines and electrical domestic equipment of that kind, where, in the last few years, the industries concerned have not been able to satisfy the whole of the export demand and the entire demand from the home market, it had been of obvious assistance to our export effort that home sales were somewhat discouraged by a high rate of Purchase Tax. Until just now I did not know that this argument had ever been contravened or suspected in the slightest degree. This, I should have thought, was one positive argument which might be adduced in favour of the tax.
A second positive argument is that, as my hon. Friend the Member for Nelson and Colne (Mr. S. Silverman) pointed out, this tax can be a good method of restraining home consumption. Hon. Members on both sides, whether in support of the Government or on the Opposition benches, constantly make impressive speeches pointing to the enormous increase in investment which this country needs. Hon. Members on the back benches opposite are fond of making these speeches. If all this talk of higher investment is to be taken seriously, and is not merely to sound impressive, it carries with it as a corrolary that home consumption must be restrained. There really is no sense whatever in one day making a speech about boosting home investment and next day pleading for the removal of every tax that reduces consumption at home. Given the fact, which is not in dispute on either side, that we need more investment and that consumption must be restrained at home, Purchase Tax has certain obvious advantages.
The third contention which has aroused most amusement on the benches opposite is that the tax can be useful as a method of planning. The Economic Secretary had great fun about planning and said that the Conservative Party have never believed in planning if, by planning, one meant the Government being responsible for allocating resources between different industries. When an hon. Friend of mine was speaking, an hon. Member opposite interrupted to pour scorn on the Purchase Tax as a weapon for planning.
I take it that what is meant by planning when one says that the Purchase Tax can be useful to aid planning is that the Government should make themselves responsible for seeing that fewer of certain goods are sold at home and more of other goods—not exactly how many fewer or how much more, but in broad terms fewer of some things and more of other things. Is that a doctrine of planning which the Economic Secretary to the Treasury really repudiates? Does he take the view that the Government have no responsibility for allocation of resources between industries?
If so, how does he explain the fact that in this Bill, under the Clause on initial allowances, a larger initial allowance is given to certain industries than certain

others? How does he explain the fact that the Excess Profits Levy last year gave certain concessions to certain industries and not to others? How does he explain why, under the present Government, as under the last Government, we are constantly having special financial provision made for certain industries such as the cinema and agriculture? It is perfectly clear from these examples that even from the Government Front Bench the notion of trying to influence the size of an industry is not unknown. If they do not disapprove in respect of E.P.L., initial allowances and other things why do they fear the consequences of the use of Purchase Tax?
One can realise the advantages which Purchase Tax can give by the effect that this Clause will have. The Chancellor has chosen the indiscriminate method of reducing Purchase Tax by a more or less disproportionate amount on all goods which will bear the tax, but it is interesting to consider the effects and ask hon. Members whether they think it is wholly irrelevant from the point of view of the economic health of the country. First, we have the tax reduced on electric fires. I wish the hon. Member for Kidderminster (Mr. Nabarro) were here. He has been foremost in pleading its fuel efficiency and that is a very great credit to him.
I do not think that anyone who is interested in fuel efficiency has opposed the view that electric fires as a method of space heating are about the most wasteful method. The hon. Member has constantly said that the Government must intervene as between different methods of space heating to encourage the more efficient and discourage the less efficient. Here we have an example of reduction in tax on what is, by general admission, the most inefficient and wasteful method of space heating we have in the country.
We also have a reduction in the Purchase Tax on motor cars, refrigerators, washing machines, television sets and domestic electrical equipment of that kind. The industries producing those types of equipment, particularly the motor industry, were in a somewhat depressed state six or nine months ago, but it is common experience in all those industries—in particular in the motor industry—today that not only has home demand picked up a great deal in the


last few months, but more important, export demand has also greatly increased.
If one believes in planning to that extent is it really wise to choose a moment when export demand for cars and goods of this sort has once more increased to reduce their price to the home consumer and increase the attractions of the home market from the point of view of the manufacturers relative to the attractions of the export market? Hon. Members may deny that this sort of change in price has any effect whatever, although that would be a rather curious position to take up. If they admit that this sort of change has the slightest effect they must agree that the effect must be in a damaging direction. One could give many other examples of the tax being reduced on goods more of which could be exported provided that the home market is not made excessively attractive.
I believe that this point is the most serious one which the Committee ought to be considering. I am not speaking with the slightest disrespect to the many important individual items which have been referred to, and which represent genuine and important constituency interests, but it is the general point to which the Committee should be addressing itself. I venture to suggest to the Chancellor—and I speak with a slightly bad conscience because I said in the Budget debate that I approved his decision to give a considerable boost to consumption this year—that that decision, which I humbly thought at that time was a right one, is in danger already of being too successful.
The figures published by the Ministry of Labour of the movement between consumption industries and the engineering industries were to a high degree alarming—one hon. Member has already referred to them—showing, as they do, that over the last year there has been a steady move towards consumer industries away from the engineering industries, and I believe that we should not take measures which would increase that trend.
A great number of these Purchase Tax reductions are not justified on economic grounds, given the country's present economic situation, and the right way would have been not to reduce Purchase

Tax indiscriminately but to have done what the Economic Secretary said was impossible, but which clearly is possible, and to have chosen certain selective reductions and relieved those goods of Purchase Tax altogether.
Whatever the Minister says about amenities, there are a number of essential household articles which still bear tax and which cannot conceivably be classed as amenities. They are genuine necessities and could be relieved of tax without any possible adverse effect on exports or investment or anything else. Surely these are the items which should have been chosen for the maximum concession instead of spreading this concession indiscriminately between goods, whether essential or not and whether they compete or not with exports.
I should like to support very strongly the plea made by my hon. Friend the Member for Southampton, Itchen (Mr. Morley) for exempting school stationery, which could have no possible bad effect on exports and investment but possibly a very good effect on our educational standards. I hope that the Chancellor will refer to that. Brushes have been mentioned, cutlery and a great many other examples. To sum up, I suggest that in all our discussions of Purchase Tax we ought to realise, whether we believe in planning or not, and whatever we say about planning, that changes in Purchase Tax will have a certain influence on exports and investments.
It is vital, if we decide that a certain sum—£30 million or £60 million—can be given away, not to give it away quite regardless of the effect of the concession on exports and investments but to give it away in such a way as to concentrate and canalise it on goods important from a household point of view and innocuous from the point of view of the country's economic life.

Mr. Douglas Marshall: I do not wish to detain the Committee for long, but the hon. Member for Salford, West (Mr. Royle) has spoken about Sea Island cotton. I wish to impress on the Chancellor two points upon this subject. I have no desire to repeat the hon. Member's speech, because in substance and in the design in which he made it I fully agree with everything he said regarding Sea Island cotton.
10.15 p.m.
I remember with what delight I listened to the Chancellor's first Budget speech, when he referred to the vital importance of the ultimate development, wherever possible, of the Empire and the British Commonwealth of Nations. I would impress upon him that although hon. Members may think that Sea Island cotton is a luxury, it is in no form a luxury to those who grow it. The islands engaged in this production have a very difficult and tight economy, and the Chancellor should realise that as in some cases these islands are in the red. He still has to meet this obligation through the Secretary of State for the Colonies.
No argument can be maintained by the Treasury that they would be unbalancing the Budget, because nothing is being collected. If this industry in the West Indies is not helped in some way, the present internal economy of those islands producing Sea Island cotton will be wrecked. I use that term because I profoundly believe it to be true. I trust the Chancellor will take notice of what the hon. Member for Salford, West has said, and will realise that I, who had the privilege of being on the Parliamentary delegation with the hon. Member, fully support the case he has made out.

Mr. N. H. Lever: It has been said of the philosopher Diogenes that when he was begging for charity and was asked what he was doing he replied that he was practising patience. After listening to the debate today I cannot help feeling that those of us who have been urging the Chancellor to make concessions are engaged in a similar exercise. That is especially so in my case as I am not one of the number of economic experts we have heard from both sides of the Committee, and I dare say I shall be listened to with even less respect.
We tend to lose sight of the fact that Purchase Tax was brought into existence not for the interesting purposes argued by my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) but to strangle the home trade. It was, and very properly, the intention of the Government of the day to strangle home trade so far as possible in order that we might win the war quickly and come back to a pleasanter land in the future. But having overcome the Hitlerite

menace we still have the Treasury menace to dispose of and the still more sinister menace of experts in all parts of the Committee.
We are told that this strangler tax is the ideal weapon for economic planning. It is of course a tax which is intended for, and is successfully used, to strangle our home trade. To say it is an ideal weapon for economic planning is like telling a man suffering from anaemia that prussic acid would form a good base for the diet to cure him. It is possible— but improbable.
I do not share the rosy illusions of my hon. Friend the Member for Gloucestershire, South, who has just spoken about Purchase Tax being the means of providing and increasing exports of the products of the engineering or the motor industries. The Purchase Tax has never done anything of the kind. The motor industry has provided the exports. What is more, the industry did not provide them because the unfortunate home consumer was mulcted of a frightening amount of tax every time he bought a new car.
The industry exported because the Government of the day very properly appealed to their patriotic impulses and pointed out the needs of the nation. In addition they possibly reinforced their implorations with the information that, in the event of the motor industry not responding, as it did magnificently and voluntarily, other methods might be employed. At all events, it was not Purchase Tax paid by people in this country that did anything to help the exports of any of the great exporting industries. I could give a catalogue of all the industries. It might be possible to find one or two minor exceptions.
My appeal to the Chancellor is for him to envisage the entire abolition of the tax. It is an evil tax in peace-time. It was never intended as a peace-time tax. It ought to be abolished except in one or two extreme cases of luxuries such as the mink coats we hear so much about at this time of the Parliamentary year. I understand that it has been said by a Frenchman that a mink coat to a woman is what the Legion of Honour is to a man. It is probably prized by her because it is costly and difficult to get. There is a great deal to be said against cheapening this decoration for the fair sex. This is


one of those cases where the raising of the price at the same time raises the value in the eyes of the user or the wearer. It would be a pity to cheapen such a valuable article of attraction and decoration.
But I do not see why, because there is a good case for maintaining a high rate of Purchase Tax on mink coats, we should have to pay on mirrors, pencils, toys and babies' rattles if any of us require to buy those commonplace articles. I do not see why we should drag in mink coats or exports to justify the maintenance of crippling taxes on these commonplace articles.
The real truth is that we are still afflicted with this tax because of the exports and the experts. I think that I have dealt with the exports. I should like to say a few words about the experts. If my Scriptural quotations are not always exact, their purpose will be clear to the Committee. I have suggested that we have still a highly intellectual and self-confident group of economic planners nestling in the Treasury. Though the Government changes these gentlemen remain in their positions, from where they inform everybody about the economic state of the nation from time to time in documents of somewhat unattractive prose and somewhat inaccurate estimates. If the hands are the hands of Esau, the voice is the voice of Jacob. Our colleagues on this side of the Committee have passed from the Government Front Bench to the Opposition Front Bench, but the voice remains the same.
We are now getting a justification from the Treasury Bench of Purchase Tax, partly because of the economic benefit which is supposed to flow from it. We all know that the experts have been proved wrong, and we have been threatened over and over again that if we do not follow their advice, this nation of ours will be left to starve. For a number of years now we have been inflated by them, deflated, disinflated and reinflated. The British economy at present is rather in the position of those obese gentlemen who go in for those curiously misnamed nature cures, where they are fasted then fed, over-heated and over-chilled and finally handed over to the remorseless energies of an over-vigorous Swedish masseur, who puts them

into the last stage of exhaustion. I fear that the British economy has been subjected to some such treatment by the British Treasury.
I am not against economic planning at all; nor do I fail to recognise that part of economic planning involves a great deal of economic theorising, but it should be done gingerly and humbly. One should look at one's figures, on the one hand, and look out of the window to see the climate, on the other. It is no good looking at a barometer which indicates rain and sitting indoors when there is blazing sunshine outside, and I suspect that some of the complacent economic planners, of whom my hon Friend is not an unworthy example, if they were to find that the clock struck midnight in the middle of a sunny afternoon, would feel tired, put on their pyjamas and go to bed.
If I may come to the great fallacy about this matter it is that these gentlemen keep on refusing to apply their theories to practical reality. This nonsense about the Purchase Tax was referred to in the admirable speech of my hon. Friend the Member for Salford, West (Mr. Royle). I am very glad to be able to follow the hon. Member for Salford, West, because he happens to be my Whip and he has been following me for a number of years. Perhaps, by my intervention tonight, in spite of supporting his views, I may find that he will be less intensive in his efforts in future. My hon. Friend has given us a glaring example. It is the case that this tax has put an island cotton industry out of existence and without putting a penny in the Revenue.
What sort of economic planning follows from this sort of thing? The curious monster produced by my hon. Friend will, if the Chancellor does not relent by next year, presumably arrive with a corkscrew emerging either from his belly or his back. We are told the Revenue will suffer and that we cannot afford to abolish this tax. It appears that we can afford to mutilate old-established industries, cast away ancient skills and strangle trade generally. The fallacy of this argument has been demonstrated in the example given by my hon. Friend the Member for Salford, West, who showed the absurdity of a tax bringing in nothing but only resulting in the strangling of an industry.
The Treasury ought to bear in mind that it will not lose by less indirect taxation, but will gain on Surtax and Income Tax. What it has also to bear in mind is that it is no good looking at the economy of the country as if it were static. It is not; it is dynamic, and the motive power of the economy is demand. If we strangle or hamper demand, as we are doing with the Purchase Tax, far from the Treasury even in a narrow sense being the gainer it must be a considerable loser in the long run if our economy stagnates.
If I might conclude with a last Scriptural quotation which I hope may be more accurate than the others, I would remind the Committee of that dealing with the muzzling of the ox that treads the corn. I think the British ox trod out the corn in the post-war period, and I feel that the Chancellor, even if he is not able to complete the unmuzzling process in regard to the Purchase Tax, should realise that this is a purely war-time tax and is not something which ought to be a permanent feature of the economic life of Britain.

10.30 p.m.

Mrs. Castle: I would not have intervened in this debate at this late hour, particularly after the scintillating speech of my hon. Friend the Member for Manchester, Cheetham (Mr. N. H. Lever) if I did not think that my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) deserved a little more support for his argument than he has received, and also if I had not earlier in today's debate been accused by the hon. and gallant Member for Ilford, South (Squadron Leader Cooper) of hypocrisy in my attitude towards Purchase Tax.
The hon. and gallant Gentleman quoted a speech which I made in the debate on the Finance Bill of 1950 in an attempt to prove that I was then taking a line which was completely inconsistent with the line I have been taking today. As I have always excelled in the feminine virtue of consistency, I could not let that go unchallenged. Indeed, if the hon. and gallant Gentleman had read the whole of the debate that took place in 1950, instead of merely going into the Reference Library of the House of Commons in an endeavour to find a few debating points, he would have found that ever since I have been in this House I have

held the same point of view regarding Purchase Tax, whether in Government or in Opposition. Indeed, if any have been guilty of hypocrisy on the subject, it is hon. Gentlemen opposite.
I agree with my hon. Friend the Member for Gloucestershire, South that there is nothing more intrinsically wicked about Purchase Tax than there is about any other form of tax. Whether it be a tax on beer, tobacco or on anything else, one can always point to anomalies and absurdities. I believe that Purchase Tax on certain articles is not only justifiable, but socially desirable. I am perfectly prepared, for example, to support the levying of Purchase Tax on refrigerators to help to pay for subsidies on food.
The Chancellor—and I think this is a final revelation of the folly of Conservative policy—has given us a Budget in which, while the price of food is rising, he has reduced the Purchase Tax on refrigerators. That is a fine consolation for any housewife, I must say. Or again, I am perfectly prepared to justify the levying of Purchase Tax on face creams in order to subsidise schools meals.
We have to make social choices and social priorities, and I am totally opposed to the idea that Purchase Tax should be regarded as the one form of taxation which should be in a special class, and that we must work towards its complete abolition. I do not believe that, and I certainly think that some of my hon. Friends who have been arguing in that sort of way are in grave danger of finishing up in the same position as the right hon. Member for Blackburn, West (Mr. Assheton), who wants to reduce Government expenditure by half. To end up in the same position as the right hon. Member is not a fate I would wish for any of my hon. Friends
The fact is that the Conservative Party have all along been utterly hypocritical on the question of Purchase Tax. When we were in power, they used it as a stick with which to beat us, particularly on the issue of the cost of living. I remember that in the great debate of 1950 the right hon. Member for Alder-shot (Mr. Lyttelton) led the Opposition benches in pressing an Amendment on the Purchase Tax, and how it was linked with the great outcry on the cost of living.
At that time the right hon. Member for Aldershot moved an Amendment in which he called for a reduction of the 100 per cent. rate to 80 per cent., the 66f per cent. rate to 50 per cent., and the 33⅓ per cent. rate to 25 per cent. I opposed that Amendment on the grounds that an overall reduction of Purchase Tax would have a highly antisocial effect; that it would give the biggest relief on the least essential articles, and that at a time when hon. Gentlemen opposite were talking about the miseries of the British housewife. It not only reduced tax on articles which ought to have had no relief at all but reduced it most on those articles.
I pointed out that the effect of that Amendment on the cost of living would be to reduce the wholesale price of essential articles such as lino, carpets, wallpaper, cutlery, stationery, brushes and combs, toothpaste, etc., by 1s. 8d. in the £. It reduced the price of articles like gramophones, gramophone records, paper serviettes, motor-cars and such less essential articles by 3s. 4d. in the £ on the wholesale price. [An HON. MEMBER: "Mink coats."] The mink coats were an even worse case. They were reduced by 4s. in the £ along with jewellery, garden ornaments, gold watches, vanity cases and vanity bags. This was the right hon. Gentleman's great economic and social policy.

The Deputy-Chairman (Mr. Hopkin Morris): The hon. Lady's speech is running too much upon the speech she made in 1950. It might have been a very excellent speech, but it is hardly relevant to the present Bill.

Mrs. Castle: I think, Mr. Hopkin Morris, that you will find that I am just coming to the link between that debate and this.
I am proving the hypocrisy of hon. Gentlemen opposite, because when I attacked the right hon. Member for Aldershot on those lines his reply was that he could do nothing else because of the terms of the Budget Resolution. He could not discriminate or propose selective reductions in taxation because he was bound by the Resolution. I asked why he could not have concentrated all his reduction proposals on the lowest rates, and he had to admit that I was right. To plead the protection of the

Resolution was shown to be merely an alibi of hon. Gentlemen opposite. Their policy is not concerned with reducing the cost of living by selective reductions of taxation where the burden is heaviest, but of carrying through overall reductions which have the effect of giving most help where it is least needed.
Time and history have justified the speech I made in 1950. The right hon. Member for Aldershot is now a Member of a Government who have introduced a Finance Bill of their own. Their first reductions of Purchase Tax are exactly upon the lines that we debated then, except that the position is even worse. The 100 per cent. is reduced not merely to 80 per cent. but to 75 per cent., and the reduction on mink coats, jewellery, furs and perfumes goes up to 5s. in the £, compared with 1s. 8d. in the £ on really essential articles. It is absolutely intolerable, in the situation in which we find ourselves—when the cost of living has gone steadily up under the Conservative Government and the price of food is now higher and is driving the housewife to desperation—to be giving 5s. in the £ relief on that sort of luxury article while doing nothing to reduce the price of clothing, which, since the Conservatives came into power, has had tax actually put upon it by the taxation machinery of the D scheme that they have carried through.
This is in complete contrast to their appeal at the Election to the women, when the cost of living was talked about, and the need to bring down the prices of essentials. Since then, the price of food has gone up, as well as the price of clothing by the imposition of taxation upon articles which were formerly free under the Utility Scheme of the Labour Government. Under that scheme, the bulk of domestic textiles like towels, sheets, blankets and personal clothing were completely tax free.
If the Chancellor has any money to give for relief of consumer burdens those are the places where it should be given. Despite Lancashire's appeal he has done nothing towards reduction of tax on textiles in this Budget, although Lancashire's pleas are reinforced by appeals from every housewife in the country. The housewife knows that the real concessions being made by the right hon. Gentleman are to people who can afford luxuries that she cannot even dream of.

Mr. R. A. Butler: I think that we might now conveniently come to a decision on Clause 9. We have had a whole day, quite rightly, on the issue of Purchase Tax, and I should be very glad if the Committee could dispose of the Clause now before it, and then take the Schedule concerned with it, before we rise tonight. With the amount of work which would appear to be necessary on that Schedule, I think we might rise at a reasonable hour, and we could then pass to Income Tax and Surtax tomorrow. If that suggestion is acceptable, I hope we shall now be able to pass to a short debate on the Schedule.
Having said that, perhaps I may add that it is not for me to intervene in the Montague and Capulet diversions and discussions of the two representatives from Blackburn—the hon. Lady the Member for Blackburn, East (Mrs. Castle), and my right hon. Friend the Member for Blackburn, West (Mr. Assheton). They have been sparring with each other this afternoon, and the roles of Romeo and Juliet I leave to them; although, I imagine there would be some hesitancy on that score from either side.
The position as regards Purchase Tax has never been revealed with greater clarity than in the speech to which we have just listened, because what strikes me and, I would think, the whole Committee, most forcibly is that when an hon. Member on the Opposition side of the Committee is talking sincerely and seriously on behalf of a constituency interest, then we hear some sense. An example was the speech of the hon. Member for the Park Division of Sheffield (Mr. Mulley) when he was talking of the silverware trade, and the need for wedding presents, and the mother-of-pearl industry. He said we had not reduced the tax enough, but later there came the clap-trap from Transport House, with the hon. Lady telling us that it was a scandal for Purchase Tax to be reduced on luxuries; and then all the nonsense about mink coats and so on. I prefer the remarks from the hon. Member for Sheffield, Park for he, like any hon. Member who has a constituency interest in a luxury trade, knows that I should have reduced the tax on such trade more rather than less.
Why? The decision on the so-called luxury trades was directed by the fact

that those trades in the former 100 per cent. tax class were actually withering away, and I am concerned about such old crafts as the silverware trade, referred to by the hon. Member for Sheffield, Park. As to the mink coats or the perfumes, I am aware that a man or woman who works in the fur trade, or in perfumes, or silverware, is just as worthy of his or her job as we are to be Members of this Committee. Such applies to the motor trade, and to any trade whose products fall in the intermediate rate, which I have also reduced.
There have been put forward some general economic reasons, as by the hon. Member for Gloucestershire, South (Mr. Crosland), in relation to a definite reduction of Purchase Tax all round. When I came to examine Purchase Tax, and realised that I had a little money to spare, my first desire was to reduce the tax as much as possible all round because it weighs too heavily on industry and particularly on certain industries; and it is most undesirable for the future of our economy that any product should bear a tax of 100 per cent. I was asked if I was aiming towards a complete abolition of Purchase Tax. That would be very difficult in view of the large revenue I derive from this source. It is about £300 million, and with the present level of defence expenditure, and the cost of social services which, contrary to propaganda, is larger than before and not smaller in many respects, it is quite impossible, with such a burden, for me to sacrifice revenue.
On the other hand, I am equally clear that a tax of this size is not one which we should envisage for ever, and that the move I have made is a move in the right direction. When it is said that I should have moved faster and further, I must draw attention to the effect on the retail dealers' stocks of a bigger reduction than I made on this occasion. We have agreed not to discuss in this debate the Hutton Report on the effect on retail stocks, so I will refrain from developing that subject. The fact is that retailers have lost quite sufficient under this Budget. I fully realise the sacrifices that they have had to put up with, but I am afraid that anybody who is out to reform the Purchase Tax has got to realise that it must be done by degrees; it cannot all be done at the same time.
10.45 p.m.
There has been a further reference by the hon. Member for Salford, West (Mr. Royle) to the textile trade. That was dealt with in general by the Economic Secretary and I shall not go into it in great detail. I would only remind the Committee of the main figures which my hon. Friend gave, that the index for textile production is half as high again as it was in the recession last July, and that the unemployment in the textile industry which was 161,000 last May, has now been reduced to a figure of only 22,000. Those are definite achievements, and they derive in part from the policy of Her Majesty's Government.
When the hon. Member for Gloucestershire, South (Mr. Crosland) refers to his own speech in the Budget debate, in which he said that a certain amount of purchasing power should be released, I would remind the Committee that as long as I occupy the position I do it will be, and has been, my desire to maintain the fullest possible employment. The Opposition cannot have it both ways. They cannot criticise me or the Government in these debates when they see a definite improvement in the employment figures and at the same time say that our policy in these difficult and serious matters has been wrong.

Mr. Royle: The right hon. Gentleman has referred to the Economic Secretary's reply on the textile question. Whatever truth there may or may not be with regard to the recession in the Lancashire textile industry, the point I raised specifically was that of Sea Island cotton, which is quite different.

Mr. Butler: I am just coming to the position of Sea Island cotton, referred to by the hon. Gentleman. The position about that is, unfortunately, somewhat governed by these international agreements in which we are involved. I am informed—and I have made further inquiries this evening after the hon. Gentleman's speech—that to introduce any kind of territorial preference in Purchase Tax, or in other internal taxes of the same type, would offend against our commercial treaty obligations under the General Agreement on Tariffs and Trade.
While, as a result of the hon. Gentleman's speech this evening, I am perfectly ready to make further inquiries into

this, I do not think it would be very easy to give to Sea Island cotton the special consideration that he wants. I would further remind him that, if I do give that sort of preference, I have to take into consideration other cloths such as Harris tweed, Malta lace, and so on, so I cannot this evening go further than telling him that in the light of what he said I will look at the matter, but I can give no undertaking. That applies also to my hon. Friend the Member for Bodmin (Mr. D. Marshall) who accompanied him on his tour of the islands where this cotton is grown. I have called for an inquiry into the state of the trade in the islands to which he referred, and I can promise him that the case he put will be very carefully looked into.
I come last to the hon. Member for Sparkbrook (Mr. Shurmer), who produced a dog which had a corkscrew in its tail. This matter has also been carefully investigated since his very striking speech. It appears that the Purchase Tax on these objects is decided not only by Her Majesty's Customs and Excise but by the trades in question and by the trade corporations involved. The unfortunate thing about this dog is that the corkscrew forms an integral part of the body of the dog, the tail. The dog is therefore taxed as a dog, and an ornamental dog. On the other hand, if the corkscrew were moved to the dog's stomach or back, the dog would take the form of a corkscrew and would be taxed at 25 per cent. This illustrates the somewhat ridiculous position into which the Purchase Tax has got in some respects.
I suggest that we should hurry on to the Schedule which comes next, and to which there is an Amendment dealing with fancy goods. The hon. Member was good enough to say that prior to the Coronation Her Majesty's Ministers at the Treasury had revised the specification of fancy goods, especially those relating to the Coronation. We have now taken a decision in the Budget to revise the specification in relation to fancy goods as a whole, and it is our idea gradually to pursue the claim made by the hon. Member for Sparkbrook that we should look into all these anomalies.
The truth of the matter is that in this question of the Purchase Tax the hon. Member for Gloucestershire, South is not so pure and beautiful as he looks. In


fact his Government messed up the Purchase Tax in many ways and they messed it up because they did not frankly face the tax properly and squarely. They tried to exempt certain articles from it because they thought they would get political credit by so doing, and they have not faced up to the fact that they left me a tax which I tell the Committee was in danger of breaking down.
I was not able to deal with it fully in my first Budget but I did my best in this one to reduce some of the rates and make them such as can be held and will bring in the revenue. I was not able to adopt the line suggested by hon. Gentlemen opposite to pick out differentially certain items and exempt them because I believed that my duty on this occasion was to reduce the rates to such as could be held by the Customs and Excise and bring in the revenue. I realised when I took the decision that it would be easy to shoot at, and not particularly popular, but I believed it was my duty to act as I did in this Budget. I sincerely trust, therefore, that the Committee will accept my decision in the spirit in which it was made.

Mr. Gaitskell: The suggestion of the Chancellor that we should take the Schedule tonight seems to us to be reasonable, and I do not want to delay the Committee for more than a few minutes on the Question "That the Clause stand part of the Bill." However, the Chancellor himself has been a good deal more provocative and controversial than I had expected he would be, and he said certain things presumably in order to extract a speech from me in reply, so I will not disappoint him.
I was interested in the observation that he thought hon. Members spoke with more sense when they represented their constituency interests than when they talked about the interests of the nation at large. He did not take that view very strongly during our debates on the Entertainments Tax. Indeed, he was very scornful of the efforts of all my many hon. Friends on that occasion, speaking on behalf of their various football clubs. It seems, therefore, that the right hon. Gentleman finds they speak with sense when they say things that suit his policy and that they do not do so when they disagree with it.
We know there are anomalies in this tax. We have heard about them every year for the past six, seven or 10 years. I thought my hon. Friend the Member for Sparkbrook (Mr. Shurmer) produced an extremely good one this evening. I hope the Chancellor will look into these anomalies and will try to get rid of them. It is fair to say that the trades concerned are not only aware of these anomalies but are also accustomed to having them raised by hon. Members here. I was interested when the Chancellor said that the trade themselves are apparently responsible for the division between the corkscrew and the dog which he described. The question of whether an article is a luxury or a necessity again is an old one.

Sir Herbert Williams: The dog or the corkscrew?

Mr. Gaitskell: The corkscrew would be a luxury to some—perhaps to my hon. Friend, the Member for Ealing, North (Mr. J. Hudson)—but I think a good many other people would regard the corkscrew, though not the dog, as a necessity. [Laughter.] I see that there is general agreement on something at least.
The question of cutlery is another very interesting point. I am reminded of that jingle, which appeared in the Oxford Book of Comic Verse:
I always eat peas with honey,
I've done it all my life.
They do taste rather funny,
But it keeps them on the knife.
One may say in that case that a knife was a necessity, but a fork was not. There are these difficulties, but when all is said and done, they do not amount to a serious undermining of the tax, a tax which brings in still about £300 million.
The Chancellor seemed to imply tonight that this tax was, in principle, a bad one. I am not clear where he stands, because, on a previous occasion, he used words which implied that he thought the tax should go on. It is an indirect tax, exactly like a tax on beer and tobacco. In principle, there is nothing inherently wrong in having another tax on other commodities. So far as the equity of such a tax is concerned, I think it could easily be held that the very heavy tax on tobacco—I use that example because I do not smoke myself—is a good deal less equitable than the Purchase Tax itself.
If it were the case that the trades concerned bore the Purchase Tax with the same goodwill as the liquor and tobacco trades bear their tax, we should probably hear a good deal less about it. One can not get away from the fact that any tax is bound to have, and is intended to have, the effect of reducing consumption in some way or other. The tobacco tax, which brings in £600 million, may not reduce so much now the consumption of tobacco, but I should say it would have some effect. Of course, it reduces the consumption on other things by reason of the amount of money which has to be spent on tobacco.
To my hon. Friend the Member for Cheetham (Mr. N. H. Lever), who was so critical of economic planning, I would say that he seemed to be implying that anything which reduced consumption in any form was wrong. That is a very nice, easy, popular line to take. I hope that no Chancellor of the Exchequer, at a time when there is relatively full employment, will ever take that line. If we had a serious depression, there would be everything to be said for it. At such a time, nobody would deny there would be a very strong case for reducing Purchase Tax and other taxes all along the line.
Our argument is that we want to preserve full employment and if, under conditions of full employment—my hon. Friend the Member for Gloucestershire, South (Mr. Crosland) made an unanswerable, logical, and clear speech on this—one has a given total volume of sales and allows more into the home market, the odds are that one will export less. There is great force in that argument. The Chancellor decided to make some concessions in Purchase Tax to stimulate consumption. I am not going to discuss whether he was right to stimulate consumption, but we will assume that is so, although my hon. Friend, the Member for Gloucestershire, South had some misgivings about it. If the Chancellor was going to stimulate consumption, was it necessary to do so on the luxury goods rather than on the necessary goods? That is the basic issue which we have been raising today.
11.0 p.m.
Despite what the Chancellor has said, we feel there is a very much stronger case for reducing taxation on the more necessary

items and very much less of a case for reducing taxation on more expensive luxury items. We do not say there are not cases here and there where some reduction might be proper. But these sweeping reductions do not correspond with the needs of the times. We believe it would have been far better to have had a series of selective reductions concentrated particularly on the things which the broad mass of the people need. That would have been fairer and better for the national economy.
We do not want to delay the proceedings of the Committee and we do not propose to divide on this Question. We are happy to proceed now with the further consideration of the Bill.

Clause ordered to stand part of the Bill.

Resolved,
That the consideration of Parts III and IV and of New Clauses be postponed until after the consideration of Schedule 1.—[Mr. R. A. Butler.]

Orders of the Day — First Schedule.—(RELIEF AND REDUCTION OF PURCHASE TAX ON CERTAIN GOODS.)

Mr. Mulley: I beg to move, in page 34, line 24, to leave out paragraph 4.
The main purpose of this Amendment is to obtain from the Government an explanation of what at first sight appears to be an extraordinary decision. We have heard that for various reasons, and not very convincing ones, it has been impossible to reduce by more than 25 per cent., a great body of things which have been put forward as deserving of special consideration. Group 29 has been singled out for special reduction, so that in effect paragraph (a) gets a reduction from 100 per cent. to 50 per cent.—as I understand it—as a result of the adding of this Schedule to the Bill. Group 29 will consist of one category and the rate of tax on all articles will then be 50 per cent. instead of 75 per cent. as would otherwise have been the case.
The articles are defined as being,
'fancy goods', 'arts and crafts' wares or the like, including personal ornaments, domestic decorations and other articles suitable for personal or domestic use, which arc presented in a fancy or ornamental form.
I should think that the corkscrew dog would come in that category. That may be the item which persuaded the


Chancellor to introduce this rather surprising exception to the general rule. It is surprising and difficult to see why
An article is not regarded as imitating another article unless the article imitated is easily recognisable, i.e. an article which merely represents something which cannot clearly and readily be identified is not chargeable as an 'imitation'
under this Group.
I was interested in the list of articles which will get the special reduction of 50 per cent. instead of the normal 25 per cent. given to what I would regard as more worthy goods. Reading down the Schedule we find that sofa dolls, tea cosies in the form of dolls and nightdress cases in the form of animals or dolls all have a special reduction of 50 per cent. I wondered why the Chancellor had introduced this special form of treatment and if he had become so popular that he wanted to make this 50 per cent. reduction for autograph albums so that he could sign his name more often.
Looking further down the list I wondered whether the Chancellor was wooing the new voter in preparation for a forthcoming election because I saw that twenty-first birthday keys were also articles which received a 50 per cent. reduction. It may be a small consolation to my hon. Friend the Member for Gloucestershire, South (Mr. Crosland), who is very firm on the subject of fuel economy, to know that, provided that it is in the form of a coal hod, a table cigarette container also enjoys special consideration and has a 50 per cent. instead of a 25 per cent. reduction.
I suppose it follows that when we reduce the rate of tax on umbrellas then the rate on umbrella stands should be reduced also, but apparently the extra reduction follows only if the stand is in the form of a milk churn. It is surprising that despite the pleas for the craft industries these are the sort of articles picked out by the Chancellor for special consideration. A further point, which may be taken because it is symbolic of the English character and is no doubt designed to attract tourists, is that warming pans are also given the 50 per cent. reduction provided that their diameter is less than six inches. No doubt that measurement also fits in with our ideas about fuel economy.
This is a surprising list. I cannot see that consideration is given to any special craft industries or employment problems, export promotion, investment or defence. It may be argued that the loss of revenue is negligible, but the Financial Secretary was good enough to inform me in answer to a Question that the cost of this concession, including the normal 25 per cent., is £1,200,000 in a full year. That is a considerable amount of money. To put the matter in perspective, it is almost exactly the sum which would be required to exempt the whole range of ordinary cutlery in Group 11. Before we can agree that it has been a wise choice that this set of articles should be given special treatment rather than knives, forks and spoons, to take one example, we shall need a very persuasive speech from the Financial Secretary in explanation of this extraordinary decision.

Mr. Boyd-Carpenter: The purpose of paragraph 4 of the First Schedule, which this Amendment proposes to delete, is to do one of the things which my right hon. Friend referred to in his speech on the previous Amendment when he spoke of clearing up anomalies in the Purchase Tax law. Most hon. Members who have concerned themselves with this subject have succeeded in amusing the Committee, or at any rate themselves, by recalling some incident or other showing a Purchase Tax anomaly. It is true, as my right hon. Friend said, that the Purchase Tax law as we found it was riddled with anomalies.
Paragraph 4 seeks to deal with one set of these anomalies. As the hon. Member for Sheffield, Park (Mr. Mulley) accurately pointed out, Group 29 of the Purchase Tax Schedule as it now stands provides for differential rates, the top rate for some and the second rate for others, with the distinction between the two turning sometimes on very narrow points of the decoration of the article. To illustrate the point, paragraph 29 (a), which deals with goods attracting the top rate of Purchase Tax, includes goods decorated by handpainting or those which are miniatures of or otherwise imitate other articles. Such fancy goods attract the top rate, but almost identical fancy goods not so decorated attract only the lower rate. That gives rise to a number of anomalies, to which hon. Members have invited our attention from time to


time, and I am bound to admit that I myself have often done so from the other side of the House.
They are really fantastic anomalies. I will not weary the Committee with a list of them, but perhaps example is the best illustration. Take the case of a brooch, not made of precious metals, but of what are called base metals. If the brooch is ornamented by some quite hideous geometrical design, it would under the old scheme attract the second rate of tax, but, if it carried a picture of a flower or a model of an animal, for that reason it would be in the top category. Another entertaining example is this. There are people with repressed martial instincts who like to poke their fires with pokers designed in the shape of a sword. Martial instincts, like most rearmament in these days, are expensive, and, under the old provisions abolished by this Bill, a poker looking like a poker is charged at the lowest rate, whereas a poker designed as a sword would have been charged at the top rate.
We have, therefore, substituted for this complicated Group 29 the much simpler one set out in the body of paragraph 4 of the First Schedule, which has only one category and attracts only one rate of tax. The purpose of this proposal has no relation to any great, broad conception of Purchase Tax law or high economic principles. It is designed to make one little clearing in the jungle of Purchase Tax law, and I hope that all hon. Members will welcome it. Narrow and fine distinctions of this kind are an awful nuisance both to conscientious traders honestly trying to find out in which category goods are taxed and to retailers who have to explain to incredulous customers the variations in price that flow from these distinctions.
It is obviously a sensible thing to try to clear up these anomalies, and we are certainly trying to find a sensible solution to the problems which arise as a result of these anomalies. We think it is a sensible solution which is embodied in the Schedule, simplifying Group 29 from one comprising different categories to one category which will attract one rate of tax. I am sure it is a commonsense proposal, and I hope the Committee will approve it.

Mr. Mulley: In view of the very persuasive speech of the Financial Secretary, and the fact that the anomalies are reduced by this amendment of the law. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That this be the First Schedule to the Bill."

Dr. Horace King: I apologise for detaining the Committee for a few minutes, but I have tried to interest the House from time to time in the special problems of the taxi industry, and I therefore welcome paragraph 6 of the Schedule, which gives some relief at any rate to the London taxi man, but, because the relief does not go far enough, I should like to see it widened before the stages of this Bill are completed. Wherever possible Purchase Tax should not fall on goods, instruments, or machines by which men make their living, and I appeal to the Financial Secretary to consider sympathetically the representations that are made from time to time during the proceedings of this Bill from groups of people like those in the hairdressing industry, mentioned today by the Member for Itchen (Mr. Morley).
11.15 p.m.
Taxi-men have been taxed almost out of existence. The petrol tax is to them a heavy burden, and all the replacements for their cabs are an additional strain, but the biggest burden they have to bear is the frightful cost of a new vehicle. Their vehicles have to conform to a high standard of efficiency and performance both in London and the provinces. So the concession under paragraph 6 by which London cabs are relieved of the crippling Purchase Tax is one I am certain the cabmen are grateful for.
I ask that this concession be extended in some way to the men in the provinces. The technical difficulty is that there is no uniform type of vehicle in the provinces as there is in London, but it should be possible to devise some method of including them. In a written reply to me today, the Chancellor suggests that provincial taxi-men can get the benefit of this paragraph provided they use the kind of cab specified for London, but it should not be beyond the wit of the Treasury to devise some method whereby using their present types of vehicles, and


provided they can be certified for use only as taxis and there is no evasion, they can benefit from the reduction which the Chancellor is giving to London taxi-men.
As he has been to other back benchers, the Financial Secretary has been very courteous to me on this question, and has consented to meet a deputation of taxi-men, both owners and drivers, from my constituency and from other places in the provinces so that he may know at first hand just what special heavy burdens they have to face. We grumble about high fares. I do not speak of the pirates, but the reputable taxi-men must pass on to their customers these heavy overheads. They watch their business shrink and sales resistance grow, and there is a good case for a special concession to them on this, and indeed every tax. I welcome the practical help which paragraph 6 gives to the London taxi-men, and I hope the Financial Secretary will consider whether it is not possible to extend this benefit to taxi-men in the provinces.

Schedule agreed to.

To report Progress, and ask leave to sit again.—[Mr. R. A. Butler.]

Committee report Progress; to sit again Tomorrow.

Orders of the Day — VALUATION FOR RATING [MONEY]

Considered in Committee under Standing Order No. 84 (Money Committees).— [Queen's Recommendation signified.]

[Sir CHARLES MACANDREW in the Chair]

Motion made, and Question proposed.
That, for the purposes of any Act of the present Session to make new provision as respects the gross value for rating purposes of dwelling-houses and private garages and of hereditaments partly used as private dwellings, it is expedient to authorise the payment out of moneys provided by Parliament of any increase which is attributable to the provisions of the said Act of the present Session—

(a) in the sums payable out of moneys so provided under subsection (1) of section one hundred and forty-three of the Local Government Act, 1948;
(b) in the Exchequer Equalisation Grants payable under Part I of the said Act of 1948—[Mr. H. Macmillan.]

11.20 p.m.

Mr. Aneurin Bevan: I am afraid that I cannot apologise to the Committee for raising this matter at this hour because we are quite helpless in the matter. The Government have put down this Money Resolution for this time of the day, and therefore we are bound to use it for the purpose which we consider to be important.
I am bound to intervene at this stage in order to call attention to a matter to which I have referred before, and I hope that on this occasion we shall have from the Minister a slightly less frivolous response than we had on a previous cccasion. It was perfectly true that prior to the Second Reading of the Valuation for Rating Bill, I did not give him notice that I intended to raise this special point. But then I was under no obligation so to do, and therefore the complaint made by the right hon. Gentleman on that occasion was completely beside the point. The support he received from his hon. Friends behind him appeared to lead to the conclusion that the spokesmen for the Opposition must now send in their speeches to the Government beforehand in order that they might know to what they have to reply.
The particular point I wish to ask the Committee to consider is one of great seriousness, but I am bound to say at once that I am going to be dependent upon the reply of the right hon. Gentleman, because it is one of such complication that I am not quite certain that I know what the Parliamentary position is. But, as it concerns Parliamentary control over public moneys, I hope that I shall be able to receive the attention of hon. Members in all parts of the Committee.
The Money Resolution now before the Committee provides
That, for the purposes of any Act of the present Session to make new provision as respects the gross value for rating purposes of dwelling-houses and private garages and of hereditaments partly used as private dwellings, it is expedient to authorise the payment out of moneys provided by Parliament of any increase which is attributable to the provisions of the said Act of the present Session—
(a) in the sums payable out of moneys so provided under subsection (1) of section one hundred and forty-three of the Local Government Act. 1948;
Section 4 of the Local Government Act, 1948, lays down the provisions


under which the valuation lists are to be prepared. The difficulty in which we find ourselves is this. Section 3 of the 1948 Act sets out the principles by which the new valuation lists are to be prepared, and Section 143 provides the authorisation of moneys from Parliament for that purpose.
The Act of 1948 made provision for the suspension for one year of the publication of the valuation lists because it was apprehended, as turned out to be the case, that the Inland Revenue Department would not be able to recruit sufficient officers to prepare the valuation lists in time. My right hon. Friend the Member for Bishop Auckland (Mr. Dalton) found it necessary to postpone publication for one year.
The present Minister of Housing and Local Government came forward last November with a special Bill, which in the circumstances he had to propose, suspending the operation of valuation under Part III of the 1948 Act, but he made no provision for any new system of valuation. In the meantime he started recruiting staff to prepare lists on the principles of the 1948 Act for entirely different purposes, of which Parliament had not approved. The Minister has been using staff and spending public money making provisional valuations on a basis not approved by Parliament.

The Chairman: I have listened very carefully to the right hon. Gentleman. I must point out to him that the Money Resolution says "any Act of the present Session." It does not apply to any Act already enacted in a previous Session.

Mr. Bevan: For what purpose?

The Chairman: The payment of any increase:
attributable to the provisions of the said Act of the present Session—
and not to increases in money spent under any other Act.

Mr. Bevan: It is either entirely retrospective or it is not. The Money Resolution before the Committee either states in terms that it relates to increased expenditure for the purposes of the existing Bill or it is attempting to validate expenditure under a previous Act. It is one or the other.

The Chairman: The Money Resolution asks for money for any increase under a Bill not yet passed in the present Session. Increases under the provisions of any other Act do not apply.

Mr. Bevan: If you look at the Money Resolution, Sir Charles, you will see that it says:
sums payable out of moneys so provided under subsection (1) of section one hundred and forty-three of the Local Government Act, 1948.
It revives for the consideration of the Committee the provisions of the Act of 1948.

The Chairman: Only so far as an increase is concerned.

Mr. Bevan: Certainly, and we are now trying to find out from the Government what the increase is due to. If one can look at the Act of 1948, there ought to have been a reduction in expenditure and not an increase. Therefore, I am not dealing with the content of the 1948 Act or of the Bill but specifically with the authorisation of moneys to be spent by Parliament upon this Bill. If we look at Section 143 (1) of the Act of 1948, to which this Money Resolution refers——

The Chairman: Surely it refers to
any Act of the present Session
and to any increase caused by any Act of the present Session. It has nothing to do with any previous Act.

Mr. Bevan: The Money Resolution now before the Committee says:
in the sums payable out of moneys so provided under subsection (1) of section one hundred and forty-three of the Local Government Act, 1948.
" What does subsection (1) say?

The Chairman: We need to look earlier than that. That is the last part of the Resolution. The earlier part says it relates to any increase that is asked for now. There is no increase asked for under the old Act. It relates to any Act of the present Session.

11.30 p.m.

Mr. Bevan: With all respect to you. Sir Charles, if this is irrelevant, then it should not appear in the Money Resolution. The fact that sub-paragraph (a) of this Money Resolution refers to Section 143 (1) of the 1948 Act, revives the authority of Parliament to consider it.

The Chairman: What it does is to increase payment under a new Act. All it does is to ask for an increase.

Mr. Bevan: I am specifically directing the attention of the Committee to finding out why that increase is necessary. The Committee is being asked to authorise an increase in expenditure, and all I ask is why is that increase sought. That, quite specifically, is the point.
Under the 1948 Act there was authorised certain expenditure, and last December the Minister asked the House of Commons to suspend the publication of valuation lists under that Act. He now seeks the consent of the Committee for an increase of expenditure under Section 143 of it. Why the increase? That is the whole point before the Committee. We want to know what he has been doing between now and last November?
So far as we understand it, the valuation officers and the estimators recruited to provide valuation lists under the 1948 Act have been used to make provisional valuation lists in a way not approved by Parliament.

The Chairman: That may be so. but it is not under any Act of the present Session.

Mr. Bevan: The Minister asks for the authority of Parliament to pay increased sums of money, and we ask, for what purpose? At the present time, Parliament has not authorised these moneys. Is it, therefore, improper for an hon. Member to ask for what purpose this increase is sought?

The Chairman: I am not objecting to that. I am objecting to the other Act being discussed.

Mr. Bevan: I am not discussing it.

The Chairman: The right hon. Gentleman is invoking it, and he is not allowed to go back.

Mr. Bevan: I am simply asking precisely why it is that the Minister requires to have increased sums of money under this Bill, and the reason I ask is that between now and the passing of the Act of 1952, the Minister has been employing staff, on his own admission, under terms not authorised by Parliament.

The Chairman: He may have been, and he may be wrong, but it is something

which does not arise under consideration of this Money Resolution.

Mr. Bevan: Then is the Minister attempting to validate this expenditure? If he is, then we want to know under what provision of the Money Resolution before us tonight is he validating it. If, on the other hand, he has been spending money which he is not validating in this Money Resolution, then by what Parliamentary sanction is he doing it?

The Chairman: He may be, but not under this Money Resolution.

Mr. Sydney Silverman: On a point of order. What strikes those of us who have been trying to follow this extremely intricate and important problem is this. Supposing the Government were, by this Money Resolution, seeking to cover up some wrongful, unauthorised use of public moneys before, that would be a reason why the Committee ought not to pass this Money Resolution today. Therefore, I submit that we are quite entitled to examine what has been the financial behaviour of the Government in the matters leading up to this Money Resolution before we are asked to decide whether we will pass it tonight or reject it.

The Chairman: As I read it, this Money Resolution is nothing to do with what has happened in the past. It is asking for money for the future, for an Act of the present Session. It is nothing whatever to do with the past; it is asking for money for future expenditure.

Mr. Silverman: How are we to judge the question whether the money proposed to be provided by this Money Resolution ought to be provided to the Government unless we are able to examine the question of how the money comes to be necessary, what has happened so far, what has been spent so far and under what authorisation it has been spent? On those facts the Committee will decide whether to give the Government the Money Resolution they are asking for today or not to give it. If we are precluded from examining the financial conduct of the Government in this matter so far, then we are being precluded from exercising the rights of the Committee to determine whether the Money Resolution shall be given now or not given now.

The Chairman: The point is that there has been no money spent by the Government under this Act so far. It cannot have been. The Act is not passed. It is perfectly clear from this Money Resolution what they are asking for. What they have done in other respects I do not know, but as far as this Money Resolution is concerned they are asking for an increase under the Act of the present Session.

Mr. Silverman: But what for?

Mr. Geoffrey Bing: with great respect——

The Chairman: Perhaps I might be allowed to conclude. We always ask for money in advance in Money Resolutions.

Mr. Silverman: We are entitled to decide for ourselves, as a Committee, whether the money which the Government are asking for is necessary or not, and whether it ought to be provided or not, but we cannot possibly reach a determination of that question unless we are entitled to look at the matters which have led up to the present position; otherwise we cannot determine the question at all. It is quite true that the Money Resolution has nothing to do with the past Act; it is quite true that the Money Resolution only asks for money to be spent for the purposes of the Act now before Parliament, but we still have to decide whether the Government ought to have that money or not, and we cannot decide whether they ought to have that money or not until we know what they have done so far.

The Chairman: Well, that may be a point of view——

Mr. Silverman: That is just what I am saying.

The Chairman: —but it is not my view, and I am Chairman.

Mr. Bevan: With all respect. The language of the Money Resolution is:
it is expedient to authorise the payment out of moneys provided by Parliament of any increase"—
of any increase—
which is attributable to the provisions of the said Act of the present Session.
But the Act under which the 1948 provisions were suspended was in November, the same Session.

The Chairman: That is quite true, but that is not under an Act of the present Session.

Mr. Bevan: Of course it is.

The Chairman: Order. This Money Resolution refers to an Act which is going through its various stages now.

Mr. Bevan: With all respect, Sir Charles, we are dealing with an Act of the present Session and it is either this Act or that Act but they are both in the same Session. In November of last year the right hon. Gentleman, by his Bill which became an Act, suspended the operations of the 1948 Act, Part III.

The Chairman: But this Money Resolution is asking for new provisions regarding——
the gross value for rating purposes of dwelling-houses and private garages.…
It is quite a new expenditure.

Mr. Bevan: It says
for the purposes of any Act of the present Session.
I am dealing with this Session. I am pointing out the fact that in November of last year the right hon. Gentleman suspended Part III of the 1948 Act and is now asking Parliament to provide moneys for any Act of this Session with respect to those provisions.

The Chairman: Not any Act.

Mr. Bevan: Any Act of the present Session in respect of certain things——

The Chairman: Exactly, and those are the new provisions, and that is what the money is asked for, not for old provisions.

Mr. Bevan: With all respect, Sir Charles, I said earlier that this was an extremely difficult and complicated matter, and where it is complicated arises from here. I wish to get the permission of the Committee to try to make it clear. The Act of 1948 laid down certain conditions under which residences were to be valued. The right hon. Gentleman obtained the consent of Parliament to suspend those provisions. He then proceeded, on his own admission, to employ staffs to value residences on entirely different principles not approved by Parliament. He now comes before Parliament and asks that Parliament shall


validate expenditures used for principles to which Parliament has not agreed.

Hon. Members: Nonsense.

The Chairman: No. As I read the English language we cannot possibly draw that conclusion from it. It is an "Act of the present Session" to do certain things and an increase is caused by it. We cannot go back to what has happened under another Act and I hope the right hon. Gentleman will try to——

Mr. Bevan: Then, with all respect——

The Chairman: Perhaps I might be allowed to finish my sentence? I am trying to be helpful. I am here to see that the Rules of the House are carried out. The right hon. Gentleman is going beyond this Money Resolution, which is what is now before us.

Mr. Bevan: In my submission there is no precedent for a Money Resolution which uses language of this kind——
which is attributable to the provisions of the said Act of the present Session.
It would normally apply to the provisions of this Bill. Either it applies to this Bill in particular or to any Act of this Session.

The Chairman: Any Money Resolution always uses the word "Act" but perhaps it would be more accurate to call it a Bill, because it is not an Act until it is on the Statute Book.

Mr. Bevan: That appears to give me my case entirely, Sir Charles. Either we are speaking of an Act or of a Bill. If we are speaking of an Act then it embraces an Act in the present Session dealing with the same subject, or it deals only with this Bill.

The Chairman: That is the point about which I do not agree and I do not want my Ruling to be continually thwarted because I am convinced in my own mind of what this means.

Mr. Hugh Dalton: We are very much at a disadvantage because, when the Money Resolution was moved, the discussion was not begun by a statement from the Government side of the Committee. Therefore, we are at a loss to know for what purpose this money is required. I venture to submit that it is perfectly reasonable, in terms

of the Money Resolution, that account should also be taken of the Act of last November. That was within the present Session and therefore it is covered by the phrase
for the purposes of any Act of the present Session.
And it is covered by the further words
to make new provision as respects the gross value ….
because in fact the Act of last November postponed the existing provisions and therefore, to that extent, replaced them by further provisions which were certainly new though they were not very definite.
11.45 p.m.
I, therefore, venture to submit to you, Sir Charles, that it is perfectly in order to call in evidence what was provided in the Act of November last year, within the present Session, and to invite the Government, at the appropriate moment, to give an explanation of what this money is needed for; to say whether or not any of this expenditure arises out of the postponement of the previous arrangements under the Act of 1952; and, if so, why this additional money is required; and, in particular, to say whether it is being used in regard to the remuneration of staffs who have been engaged for purposes Parliament has not authorised.

The Chairman: I have no doubt that the Government, in due course, will make an explanation. It is not my affair who rises to speak, but it is my affair to try and keep the debate in order. It is clear that all that is asked for is in regard to an Act of the present Session.

Hon. Members: Why?

The Chairman: Because it says so here.

Mr. S. Silverman: Are we competent to discuss why?

The Chairman: It is quite competent to ask why the money is required, but this is going much further than that. I will not allow the Minister or anyone else to discuss matters which are not in order.

Mr. Eric Fletcher: I am sure that all hon. Members are anxious to try and appreciate your Ruling. Sir Charles. I was hoping, if I succeeded in catching your eye at a later stage in


this debate, that I should be able to give some arguments why I am opposed to this Money Resolution being passed, and to explain why I wish to vote against it. To enable me and other hon. Members to do so, we must have an opportunity of ventilating the matter and giving our reasons. What my right hon. Friend is doing is to indicate reasons why we are opposed to this Money Resolution.
One reason I am opposed to it is that I am in the dark as to why this money is wanted. I do not think the money is necessary and I was hoping to put questions designed to give the Minister an opportunity to explain. After all, we are in Committee and our debates are relatively informal compared with the debates which take place on Second Reading. Time is no great object, and this is the traditional opportunity for Parliament, through the Committee, to control expenditure carefully. What my right hon. Friend was trying to do, and what we are all trying to do, is to elicit information from the Government before we can be in a position to vote upon this Money Resolution. My right hon. Friend was trying to assist the Minister, when he replies, by indicating the kind of points on which it is essential we should have information before expressing our opinion.
We must be in a position to put, as clearly as we can, the questions on which information is required. These questions involve information as to what has happened to make it necessary that further expenditure should be incurred. This involves consideration, not only of the provisions of this Bill, but of the Act passed in this Session, which is called the New Valuation Lists (Postponement) Act, 1952.

The Chairman: It is clear this Resolution is for Valuation for Rating. That is the name of the Bill for which this money is being asked. It is quite in order to ask how much money is wanted and what it is for, but it only deals with an Act of the present Session.

Hon. Members: No.

The Chairman: It is no use saying, "No." It is as clear as daylight.

Mr. Bevan: Mr. Bevan indicated dissent.

The Chairman: It is no use the right hon. Gentleman shaking his head. I am sorry if what the right hon. Gentleman wishes to say is not in order on the Money Resolution, but it is my duty to keep the Committee in order.

Mr. Bevan: All I am desirous of doing is to find out how we can address certain questions to the Minister. What the Money Resolution says, and it is a most original form of words, is
That, for the purposes of any Act of the present Session…
The only other Act of the Session with this subject matter is last November.

The Chairman: That does not make provision——

Mr. Bevan: It does.

The Chairman: —for the increase now asked. That is the whole point.

Mr. Bevan: What it does, with all respect, is to authorise the payment of moneys by Parliament under any Act of this Session dealing with this subject matter which makes new provision. The only other Act—and it is wrongly phrased, because it is not an Act, it is a Bill—the only instrument this Session which makes new provisions for the valuation of residential property is this one now before the Committee.

The Chairman: No. That is where we part company. This Money Resolution asks to make new provision regarding to the gross value for rating purposes under the Bill before the House at the present time.

Mr. Bing: The Government may be at some disadvantage in this matter. As I see it, the difficulty is that it is quite likely, owing to the impetuosity of the Minister of Housing and Local Government, that the Government may have incurred some illegal expenditure. Under those circumstances the House, in the tolerant attitude we adopt towards the right hon. Gentleman, may well choose to include in this Bill a Clause dealing with some indemnity for this illegal expenditure. But if we allow the Money Resolution to pass without making provision for the illegal expenditure incurred by the right hon. Gentleman at an earlier stage we shall not be able at a subsequent stage——

The Chairman: That could not be done under this Money Resolution.

Mr. Bing: No, Sir Charles. That is exactly why——

The Chairman: Order. It could not be done. The phrase is
That, for the purpose of any Act of the present Session …
It is always called an Act. I have never seen other words used.

Mr. Bing: With respect, Sir Charles, that is the reason why, as I understand my right hon. Friend, we should reject this Money Resolution, because under it we cannot indemnify the right hon. Gentleman. If we proceed with the Bill we shall be unable to deal with the illegal expenditure incurred. That is the reason why we should have a Money Resolution wide enough to deal with the unfortunate failure of the right hon. Gentleman to deal with money as allocated by Parliament——

The Chairman: If the right hon. Gentleman had wanted a Money Resolution to deal with that he would have instructed the Parliamentary draftsmen to that effect. He has not done so and it cannot arise.

Mr. Bing: With respect, it is because the right hon. Gentleman has failed, as you yourself have said, Sir Charles, to give proper instructions to Parliamentary counsel the Committee should reject——

The Chairman: I did not say any such thing. I said that if the right hon. Gentleman wanted to provide in such a way he would have instructed the Parliamentary draftsmen to do so. The Money Resolution before us is all that we can consider and I hope that we may get on.

Mr. Bevan: Mr. Bevan rose——

The Chairman: Order. I am confident that I am right. I hope that we may get on.

Mr. Bevan: May I have your guidance, Sir Charles? As I understand the position what you are saying is that the Money Resolution deals only with expenditure authorised under this present Bill and that consequently——

The Chairman: Increase in expenditure.

Mr. Bevan: Exactly.

Mr. S. Silverman: On a point of order.

The. Chairman: I thought that the right hon Gentleman was on a point of order. He was asking for my guidance. I shall be very glad to answer anyone I can, but I can only deal with one at a time.

Mr. Bevan: I was asking for your guidance, Sir Charles. As I understand the position, the present Money Resolution authorises only expenditure under this present Bill——

The Chairman: An increase in expenditure.

Mr. Bevan: An increase in expenditure under this Bill. In 1952, the valuation lists made under the 1948 Act were suspended. May I, therefore, take it for granted that any increased expenditure which the Minister has incurred between 1952 and the present time is not validated by this Money Resolution?

The Chairman: It certainly could not be unless the Bill was retrospective; but under this Money Resolution it would appear that it could not be.

Mr. Bevan: So, in point of fact, the present Money Resolution does not authorise any expenditure between 1952 and the present day. In fact there is no indemnification in this Money Resolution. If that be the case, I am perfectly satisfied.

The Chairman: That is my reading of the matter.

The Minister of Housing and Local Government (Mr. Harold Macmillan): I, too, shall have to seek your guidance, Sir Charles, because I am not quite sure how far I should be in order in replying in any detail to the points which the right hon. Member for Ebbw Vale (Mr. Bevan) has put. On this occasion I wish to pay my tribute to him. He was good enough to give me notice some hours ago that he intended to raise this matter. He took some objection to the fact that I thought that on the Second Reading of the Bill it would have been more courteous if he had given me notice that he intended to raise it then. However, perhaps I was wrong. It was out of order then and apparently it is out of order now.
On Second Reading I made a reply which he was good enough to refer to as a frivolous response. The only point was that he was not there to hear it. I understand that he had an engagement of far greater importance than attendance upon the House of Commons. He was at a meeting of the Labour Party Executive. He was fighting for his life——

Mr. A. C. Manuel: On a point of order. You have been busily occupied, Sir Charles, in keeping Members within the bounds of order in what they were saying. I want to know if you will rule in the same way when Front Bench speakers talk about Labour Party activities in connection with this Money Resolution.

The Chairman: I was waiting to see whether the point had a bearing on anything which the right hon. Gentleman intended to say.

Mr. Macmillan: I was replying to the observations of the right hon. Member for Ebbw Vale. Hon. Gentlemen are very sensitive about all these matters. Perhaps it was only a Turpin and Humez affair after all, this great battle. Never mind, we now come to what this Resolution does.
12 midnight.
If I understand your Ruling, Sir Charles, I had better confine myself to what it does. The right hon. Gentleman knows quite well, having introduced many Resolutions in very much the same terms, that this is pretty well a stock form. Clause 7 of the Bill is more or less the stock Clause designed to cover any increase which the Bill might cause in the cost of the valuation service, and that is its first function. Then, as we always have to do, it covers any increase which the effect of the Bill may have upon the working of the equalisation grants, because almost any change which might take effect might have its reflex action upon the distribution of the equalisation grants according to the formulas which are applied. So this is almost a stock Clause to take the power to have the necessary expenditure to cover both of these possibilities.
In point of fact, it is expected that, if this Bill, for which this is the Money Resolution, should come into effect, the

expenditure will probably be rather less than if we were to go on with the 1948 system, but there is the possibility that it may be a little more, so it is always necessary to take these powers in case there might be a slight increase in the new system of valuation, if approved by the House and by Parliament. This is merely the ordinary stock form. Indeed, these are actually the same words as were used in the Act of 1948, in connection with which the right hon. Gentleman moved a Money Resolution:
For the purpose of any Act"—
not Bill—
of the present Session to amend the law …
They are almost the same stock words as in this Resolution. That is the purpose of the Resolution, and it is its sole purpose.
I should be out of order, and, therefore, do not intend, to open up an agreeable discussion on whether I am permitting some improper procedure, for which I shall be held personally liable by the Public Accounts Committee, mulcted in immense damages which I should not be able to pay, so that I should have to ask the aid of the right hon. Gentleman to get an Indemnity Bill. When it comes, I shall certainly take his help. He has the famous name of the man who was shot to encourage the others. He will have a kind of hereditary interest in helping me, but, as all that would be quite out of order, I shall not refer to it.
I shall merely assure the Committee once more that the Resolution does exactly what it says. It provides for any increase, should there be an increase, which we do not think likely, in the new method of valuation over the old, and it provides for any increase which in consequence of its results might flow into the equalisation grants, because it may have the effect of different results in different local authorities, and that must be provided for. If there has been this crime, which I am alleged by the right hon. Gentleman to have committed, there may perhaps be a Supply day or some other opportunity when we can debate it, when I would be very glad to rebut the arguments he might put up, but I will leave it at that for tonight.

Mr. Bevan: The right hon. Gentleman has made it quite clear, as the Chair


made it clear, that what we are now dealing with is merely a Money Resolution to validate what may be an increase in expenditure under the terms of the present Bill. If we were suspicious of the term "any Act of this Session" it is because of the sharp practice of the present Administration, which, only quite recently, completely reversed the procedure of Parliament for over half a century by concealing in innocent and formal language what was, indeed, a trick. We were anxious to find out from the right hon. Gentleman whether, in fact, his interpretation of the words contained here validated the expenses which he has incurred between November of last year and the present Bill.
We now understand from him—and we have understood from the Chair—that that expenditure is, in fact, not validated, and that all we are dealing with is the increased expenditure under the Bill. We have got that far. With his customary courtesy the right hon. Gentleman has used a private explanation which I gave to him. I met him this evening and told him I intended to raise this matter. I told him why I was not able to be present on the last occasion, and with his usual good taste he has used a private conversation for public disclosure. All I can say to him is that in the future I shall treat him like the cad he is.

Hon. Members: Order.

The Chairman: I must ask the right hon. Gentleman to withdraw that remark. It is out of order to call each other cads across the Floor. I hope the right hon. Gentleman will withdraw his remark.

Mr. Bevan: I regret that in the circumstances I was led to use a form of expression that normally I would not use, but it is not customary in the procedure of the House of Commons for Members to use, in public, explanations given to them in private conversation. It is not normal, and if I am asked to withdraw what I said the right hon. Gentleman should withdraw what he said. I ask him now to withdraw.

Mr. H. Macmillan: I cannot let that pass. The right hon. Gentleman was good enough to tell me today he would raise this matter, and gave the reason why he

was not present at the end of the last debate, and to say I am not allowed to make ordinary use of what I thought was a piece of fun——

Mr. John Baird: Hypocrite !

Mr. Macmillan: —is a most monstrous accusation. The right hon. Gentleman has really tried to make a great mountain out of a very small mole hill and a little piece of fun across the Floor. The fact is that he likes chaffing and attacking other people, but, like many people who make attacks, he is very sensitive to a counter-attack. Since I know his character, since we have had a long friendship in this House, far apart from party discussions, going back for many years, if I have in any way offended him I am sorry, and I hope he will take it in the spirit in which it was given—as a piece of fun.

Hon. Members: Oh !

The Chairman: I think we might try to calm ourselves. I think I heard the hon. Gentleman for Wolverhampton (Mr. Baird) call the Minister a hypocrite.

Mr. Baird: So he is.

Hon. Members: Order.

The Chairman: I hope that that remark will be withdrawn. We really must behave properly.

Mr. Baird: I did use the word "hypocrite," Sir Charles, and if it is an unparliamentary term I certainly withdraw it, but the argument of the Minister was such that it is difficult to find a word for it.

Mr. Bevan: The Minister has withdrawn what he said in an extremely discourteous fashion. Nevertheless, it must be obvious to hon. Gentlemen in all parts of the Committee that if private conversations are used in public then there is no possibility of verifying what has been said. I could say what I thought the right hon. Gentleman said to me, and where would we go from there?
It has always been considered the proper thing that private conversation between Members ought not to be used in public debates. That is all I say, and I accept the withdrawal of the right hon.


Gentleman, and hope he will not do it again. [HON. MEMBERS: "You withdraw."] I have done so. We are now in Committee on the Money Resolution, and the Report stage has still to come. We shall have to consider what we have to do because, in fact, the right hon. Gentleman has been spending public moneys without Parliamentary validation, and we——

The Chairman: That is the very point which I said could not be discussed. It has nothing to do with this Money Resolution.

Mr. S. Silverman: I hope that my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), although he may not feel it right to press his point further tonight, will, nevertheless, reserve it for the Report stage of the Money Resolution. For my part, I am bound to say that I am not in the least satisfied with or impressed by the explanation given by the Minister.
It is quite true that he has said that nothing in this Money Resolution would validate any improper expenditure incurred, and it is quite true—and I think we are grateful for it—that you, Sir Charles, have expressed the same opinion. But I hope I shall not be thought disrespectful if I say that the interpretation of Acts of Parliament is not accepted in the courts according to the opinion either of the Minister in charge of the Bill of how they ought to be interpreted, or, with the greatest possible respect, of the Chairman of the particular Parliamentary Committee who happens to be presiding at the moment.
In spite of what the right hon. Gentleman has said, and in spite of what you, Sir Charles, have said, I am not at all satisfied that the courts if called upon to interpret the Bill we are now considering and the Money Resolution would not, nevertheless, come to the conclusion that they did validate expenditure which, but for this Money Resolution, would not have been legal. I am not saying whether they would be right or wrong in that opinion. I am saying that the interpretation of an Act of Parliament will not be for the Minister and will not be for the Chairman of Ways and Means, but for the courts.

The Chairman: I have not the advantage of being a lawyer, so I cannot

express an opinion as to what the courts would do. All I am dealing with is what is on the Order Paper, which I must do, and I am saying what I think is right.

Mr. Silverman: I am not quarrelling with it for a moment, and I am not seeking to reopen the discussion which my right hon. Friend wished to open and which you, Sir Charles, thought it would be wrong to pursue. I accept your ruling. What I am saying is that although it has been said that the Money Resolution, in the form in which we are being asked to pass it, would not, in fact, do certain things, and that therefore it is not proper for us to discuss those certain things, I am not satisfied that the courts would come to the same conclusion. Until we are satisfied of that, I suggest that the Committee and the House would be very ill-advised to give the Government the Money Resolution for which they are asking without very much clearer and fuller explanations than we have so far been given. That is why I am asking my right hon. Friend not to abandon his point at this stage, even though he is precluded for the moment from pursuing elucidation of it.
I quite see that the word "Act" in the Money Resolution must obviously be interpreted as including the Bill and which will some day be an Act. Of course, any Act of the present Session must include the Bill we are now discussing, but that is not the point raised. The point is whether it is exclusively limited to the present Bill or whether the words
any Act of the present Session
do not include, besides the Bill we are now considering, any other Act on the same subject which Parliament has passed within the calendar limits of what we describe as the present Session of Parliament. I hope that my right hon. Friend will reserve all his rights in this matter. No function of Parliament is more fundamental to the proper operation of the Constitution of this country than control over money. It would be quite wrong of hon. Gentlemen on this side to abrogate their function of seeing that money is not expended by Ministers without proper Parliamentary control.

12.15 a.m.

Mr. Bing: I wished to address the Committee for a few moments to show


why I do not think it is desirable to pass this Money Resolution. If, by way of preface, I deal with the affairs of the Conservative Central Office and the battle that raged in 1774 when the Tory Government were very much at fault, I hope that you will allow me the same latitude as you allowed to the right hon. Gentleman, Sir Charles.
The Committee ought not to pass a Money Resolution as restricted as this. The Government are not coming here asking for all the money that they require. It may well be that the right hon. Gentleman did not appreciate that he had spent money in advance of passing the Bill. His system of accountancy is a typical Conservative one, rather as it is done in the City; you spend the money first and you account for it afterwards. It might be better to deal with public money in a rather stricter way than that by which the right hon. Gentleman works his housing figures.
Hon. Gentlemen on the Government side ought to consider whether this Money Resolution is wide enough. My suggestion is that it will be nothing like wide enough when we come to discuss the Bill in Committee and find that we shall have to put in a Clause to excuse the unfortunate irregular expenditure of the right hon. Gentleman, which I am sure he did in the utmost good faith. It is necessary to preserve proper form in these matters. We shall find in Committee on the Bill that the very Clauses that the right hon. Gentleman will want to move, in order to regularise the position, are cut out by his own Money Resolution.
It would be a great mistake on the part of the Opposition if we were to take transitory advantage now and let the whole thing go through on the nod, and later say to the Minister, "You cannot complain, because you passed the Money Resolution." It is only fair to give an opportunity to the Financial Secretary to the Treasury, who has a direct interest in this matter, to explain that the Government would like to withdraw this Resolution and deal with it at a little later stage, after reconsidering the matter.
Therefore, I make an appeal to the Committee. It is apparent to all sides that there has been irregular expenditure on the part of the right hon. Gentleman. [HON. MEMBERS: "NO."] I think you

yourself, Sir Charles, reproved hon. Members for indicating their views by shakes of the head. If any hon. Gentleman thinks that the right hon. Gentleman has not committed irregular expenditure will you let him get up and say so? [HON. MEMBERS: "It would be out of order."] If I were out of order, Sir Charles, I am sure that you, at least, would stop me.

The Chairman: Hon. Members are going beyond the Money Resolution.

Mr. Bing: Of course we are. [HON. MEMBERS: "Oh."] That is exactly what I am saying. The problem we have to deal with is not dealt with by the Money Resolution.

The Chairman: We have to deal with it in this Committee.

Mr. Bing: With great respect, surely we cannot deal with the matter in Committee unless we arrange that the Money Resolution is wide enough to deal with any Clauses which the Government may wish to insert during the Committee stage? It may well be that the Minister still thinks he has not incurred any illegal expenditure; but supposing he has. Would it not be reasonable——

The Chairman: We cannot consider that because if he has incurred illegal expenditure, he has certainly not done it under this Money Resolution. The expenditure may have been illegal, but it has nothing to do with this.

Mr. Bing: Surely it is because this expenditure has been incurred—expenditure which is illegal—that——

The Chairman: We cannot talk about illegal expenditure, because that cannot possibly arise; and it cannot arise because this Bill is not law yet.

Mr. Hugh Delargy: I should like to seek your guidance, Sir Charles. I should like you to tell us how much wider of the rule is my hon. and learned Friend the Member for Hornchurch (Mr. Bing) than was the Minister when he so disgracefully divulged to the Committee the contents of a private conversation which he had several hours ago with my right hon. Friend.

The Chairman: I have to be quite impartial in ruling hon. Members out of order. We have had this matter thrashed


out thoroughly, and my Ruling, I should have thought, is perfectly clear. If the Committee disagrees with it, I cannot help that.

Mr. S. Silverman: I take it that the point put by my hon. and learned Friend is that he does not think the Committee ought to adopt the Money Resolution now before it because, on the rulings which we have had, it is not wide enough to cover something which he thinks ought to be covered in the Bill. Why is that not a good argument to be advanced in a debate where the question is whether the Money Resolution be adopted or rejected? It has repeatedly been ruled from the Chair that the Money Resolution does not deal with an allegation—if an allegation is possible about unauthorised expenditure in the past—but if my hon. and learned Friend comes to a conclusion, rightly or wrongly, that there was some unauthorised expenditure and the Bill ought to indemnify——

The Chairman: I have tried for an hour to say that if there has been unauthorised expenditure, it has nothing to do with this Money Resolution; nothing whatever, and it cannot be discussed now.

Mr. Silverman: I accept the Ruling that there is nothing in this Money Resolution about unauthorised expenditure under the Bill or any other Act of the present session. But my hon. and learned Friend's argument is founded upon that fact because he thinks that no Money Resolution ought to be adopted by the Committee unless drawn in such terms as would enable the Bill to which it was related to validate any mistake of that kind which might turn out to have been made.
With the greatest respect, Sir Charles, I find it very difficult to understand why any hon. Member of the Committee should not be entitled to argue that this Money Resolution ought not to be adopted precisely because it is far too narrow to cover things which might, on the Committee stage of the Bill, turn out to be necessary to be covered. I should have thought that the kind of point which has been argued out, for and against, on every consecutive Money Resolution I have heard debated in this Committee during the 18 years I have been a Member of the House of Commons.

The Chairman: The Question is, "That for the purposes"——

Mr. Bing: With great respect, Sir Charles, I had not finished addressing the Committee on this matter. I gave way only to hear what you had to say. If I would be in order in so doing—and I hope I will be—perhaps I might refer to the actual words of the Explanatory and Financial Memorandum which accompanies the Bill itself. I refer the Committee, if I may, to the part headed "Financial effect of the Bill" which says:
Clause 7. The Bill may possibly involve an increase in the amounts payable under section 143 (1) of the Local Government Act, 1948, for the remuneration and expenses of valuation officers and their assistants and the expenses of Ministers under that Act.
The argument that I have been attempting to address to the Committee is that this Financial Resolution is not wide enough to cover what is foreshadowed in the Explanatory and Financial Memorandum because, as we understand from the Minister, already a good deal of this expenditure has been incurred and these men have been set to work on these new tasks in anticipation of the passing of the Bill. If that is so, it may be perfectly proper and right, but the Financial Resolution——

The Chairman: It would be most improper under this Bill to start expenditure until the increase has been granted.

Mr. Bevan: Under the Financial Memorandum.

The Chairman: The Financial Memorandum is not part of the Bill. We are dealing now with the Money Resolution.

Mr. Bing: All I am asking—and I think we ought to have some reply from someone opposite before we proceed further—is, what are these increased expenditures? Perhaps I can put it in this way. Has the Minister had any previous experience of applying staff to the tasks which they will, in fact, carry out under the Bill? Let us leave aside the question whether the expenditure is legal or not. At least we can get some indication of the sum involved if we hear from the Minister and have a definite answer to the question. Have people been engaged before, up to this date, on the tasks that they will be engaged on if this Bill becomes law? If they have


been it will give the Committee a very good idea of the sort of expenditure likely to be incurred under this Bill. If the Minister has already been employing these people to do these jobs, leaving aside the question whether he has any Parliamentary authority to do so or not, and assuming for the purposes of this debate that he has got full Parliamentary authority, that somehow the thing slipped through in the Estimates and neither you nor I, Sir Charles, noticed it——

The Chairman: Perhaps I did not notice it, but I do notice that it cannot be done under this Money Resolution.

Mr. Bing: Mr. Bing rose——

The Chairman: I do ask the hon. and learned Gentleman whether this has not gone far enough. He knows perfectly well how far he can go, and I am getting a little cross now.

Mr. Bevan: On a point of order. Until now we have been dealing with whether it is possible to discuss the validation of expenditure by the Minister between 1952 and the present time. You ruled, Sir Charles, that this present Money Resolution, whatever it does, does not validate any expenditure, whether illegal or otherwise. We leave that point. The next point we come to is whether the Minister can give us any idea at all as to what is the increased expenditure which is being authorised by this Money Resolution. That, I submit, is in order, if anything can be in order.

The Chairman: That is in order, and the reply has been given.

Mr. Bevan: With all respect, it is not for the Chair to say whether a reply has been given. That is for the Committee.

The Chairman: I am here to conduct——

Mr. Bevan: Oh, no.

The Chairman: Let me finish my sentence. The right hon. Gentleman does not know what I am going to say. I am here to conduct the affairs of the Committee. The right hon. Gentleman rose to a point of order and asked whether to ask the amount of expenditure was in order. I said it was quite in order, and the answer has been given; I heard it myself.

12.30 a.m.

Mr. Bevan: With all respect——

The Chairman: We are on a point of order, are we not?

Mr. Bevan: Yes.

The Chairman: Well, I am answering it.

Mr. Bevan: With great respect, Sir Charles, the Chair is not in a position to pass judgment upon the adequacy of a Ministerial reply.

The Chairman: I did not express any opinion on its adequacy; I said the matter had been replied to.

Mr. Bing: It seems to me, with great respect, that my speech was directed to exactly this point. I was suggesting that the Minister had instructed various valuation officers to make valuations on the new basis. He can tell us, first of all, whether that is so or not. If, in fact, that was done, he is then in a position to give us some indication of the cost. Up to now he has said he does not know, but surely he must know what the cost is if he has instructed the valuation officers to make a valuation on the new basis, because he will know how many he has to employ.

The Chairman: He cannot have done that legally under the present Act and, therefore, we cannot discuss it.

Mr. Bing: He may not have done it legally.

The Chairman: If he has done it illegally it does not arise now. The Committee is being asked for an increase under an Act of the present Session.

Mr. S. Silverman: It is difficult to follow this Ruling, Sir Charles. Supposing it should turn out on inquiry that all the work contemplated by this Bill has been done and has been paid for, whether legally or illegally. Surely that would be a relevant part for the Committee to consider when it is asked whether it will grant the Government more money to do a job which, on that hypothesis would already have been done. Surely we must be entitled to ask the Government, "How much of the work which you propose to pay for by the moneys under this Money Resolution has already been done? Because, if it has


all been done, you will not need any more money."

The Chairman: It cannot have been done under this Act.

Mr. Bing: Surely we are concerned now with whether it is necessary to make any further provision for any sums to be spent. If by some oversight the total sum needed has already been paid out, whether legally or illegally, there is no need for us to vote it because the job has been done. If, for example, there was a Bill for building a battleship and the battleship had been built by the right hon. Gentleman the Prime Minister—who is always inclined to do those things without any appropriate authority—then we might say that it was unnecessary to pass the Bill. In the same way it is unnecessary to pass this Resolution if the Minister has done all this work before the Bill is introduced. All I am trying to seek is some information from the Minister of Housing as to how much of this work has been done already, because that will give us some guidance.

The Chairman: None of it can be done legally under this Act.

Mr. Bevan: That does not matter.

Sir Herbert Williams: On a point of order, Sir Charles. Do you not think it would be a good idea if we had one speech which was remotely in order? Every speech to which I have listened so far has been clearly out of order. [HON. MEMBERS: "No."] Unless it relates to future expenditure, it is out of order.

The Chairman: I am sorry if I have not satisfied the Committee. I am doing my best, but have not been very successful I am afraid.

Mr. S. Silverman: On a point of order, Sir Charles. You have said—and I am sure that you are right—that no money can have been spent already under this Bill. That is a proposition with which I am sure every hon. Member will agree. But, with respect, that is not the point which is troubling us. We are being asked under this Bill to pass a Money Resolution which will enable the Government to spend moneys under the authority of the Bill. What the Committee is concerned with is the question whether it is necessary to do

so. Whether moneys previously spent were spent under the authority of this Bill or any other Act, or no Bill or Act at all, is not relevant here. The important thing is whether the job, for which money is now sought, has been completed and paid for so that no more money is necessary. Whether any previous work done had been paid for under a Money Resolution or by this Bill is irrelevant to that question. We are only concerned whether the Government requires any more money, such as this Money Resolution seeks to provide.
Clearly, if work still needs to be done, it will have to be paid for and Parliament will have to provide the money. If the work has already been done and paid for, no further money will be required. We have to decide that question tonight. How can we decide it without knowing what work has been done already which bears upon the work contemplated and which is to be paid for under this Money Resolution?

Mr. Bing: My point seems to be very reasonable. I cannot understand the Minister of Housing and Local Government or the hon. Member for Croydon, East (Sir H. Williams), whom we all congratulate on his recent honour, and whom, no doubt, the right hon. Gentleman consulted about procedure before taking any step in this matter. At least, we are entitled to some explanation as to how much the work has cost already? He can either tell us or——

The Chairman: The work cannot have cost any money already under the present Act. There is no authority for any expenditure under the present Act.

Miss Irene Ward: Take a hammer.

Mr. Bing: It may well be that the right hon. Gentleman is acting illegally. Whether he is or not does not matter in assessing the amount of the expenditure. He knows how much it cost. That is what we want to know. The fact he was not authorised to spend the money is neither here nor there. The horrible fact is that he has spent the money whether he was entitled by Parliament to do so or not.

The Chairman: That is the whole point hon. Members have been trying to make. That may or may not be so, but it does not arise now.

Mr. Bevan: We have dealt with the other point, which you have been good enough to advise the Committee about, Sir Charles, and now we come to the second point. Why is the Minister for Housing and Local Government unable to give the Committee a clear idea of what the increased expenditure, if any, will be? He is asking the Committee to give him a blank cheque. He said that there might not be increased expenditure at all. In my experience, whenever we have discussed Money Resolutions, we have always required a certain amount of precision. Quite frequently, Money Resolutions contain an estimate of the amount of money involved. This Money Resolution contains no estimate, and I understand if hon. Members opposite do not care very much if the Money Resolution contains any. We are in a very unusual situation.
The Minister of Housing and Local Government defended his Bill last November on the grounds that, in fact, it enabled the Government to make explorations. He said:
I must refer once more to the question of the irregularity … I explained it to the House in August, and I explained it again in November"—
this is what the right hon. Gentleman said on this Bill immediately before the Recess—
—and I think it was a perfectly straightforward account. We have continued to make a certain number of valuation tests in the old manner, and we have made some in the new manner of an exploratory kind. I do not see how anyone can complain of that on the part of the Inland Revenue so long as these tests are purely exploratory. The only thing which would be wrong would be if they tried to give such valuations legal effect when there was no legal power behind them."—[OFFICIAL REPORT, 21st May, 1953; Vol. 515, c. 2393.]
Quite right, but no Minister in my recollection has had so many opportunities as the right hon. Gentleman has had of making pilot tests which would lead him to conclude what would be the increased expenditure, if any. I am not questioning at the moment the legality or otherwise of it, but he has been permitted by the House to spend the money and to use officers for the purpose of making tests as to what would be the effect of the new principles of valuation contained in the Bill.
Therefore, he is in a better position than any Minister has ever been to tell us how much increased expenditure if

any this Bill will involve. But he has given us none. He has already said that he does not know whether it will cost any more money or not, yet he had had these pilot tests. I should have thought that it was perfectly in order for the Committee to ask the Minister to give more precise information as to the conclusion he has reached on the tests he has already made.

Mr. Arthur Colegate: How could he be more precise than he has been?

Mr. Bevan: We are at liberty to explore what financial obligation the Committee is undertaking. Hon. Gentlemen ought not to be impatient.
There is another issue, too. We do not know what effect the proposals that the Minister is now asking the Committee to undertake will have on the general level of valuation. Under the second part of the Resolution if the rateable value of local authorities is reduced higher Exchequer grants are attracted under the Equalisation Fund. Under the Act of 1948 the Government are under an obligation to make good any decline in revenue the local authorities may get from the Equalisation Fund.
If the right hon. Gentleman has made these exploratory tests then, even if he cannot say under the first heading how much more money the staffs will cost in making the new valuations, he ought to be able to say if there will be any increase in the Equalisation Fund or not. He will know whether the rateable value per head of the population in his test areas has gone up or down. If it has gone down that will attract more money under the Equalisation Fund. Is he unable to give us any idea at all whether there will be any increase and, if so, how much?
This is the precise second heading of the Financial Resolution. The first heading I am prepared to dismiss although I thought that we could have more precision. I understand that the right hon. Gentleman has taken many thousands of test cases—at least 50,000 or 60,000. If he has taken them in the areas which attract money heavily—in Yorkshire, Durham and South Wales—he should be able to say what is the effect of the new principles on the rateable value per head of the population.
Has he no information? Is he suggesting that his pilot schemes have given him no precision of any sort? If precision has been given are not we entitled in the Money Resolution to know how much additional Exchequer money will be attracted? Are we to have this ambiguity? I hope that hon. Members opposite will realise precisely what they are agreeing to. I was a Minister for 6½ years and I say that if Ministers are to be permitted to spend money on exploratory schemes not sanctioned by Parliament—and that I do not discuss—then an entirely new epoch opens up. I hope that hon. Members will remember this. This chicken will come home to roost all right. I am not arguing that. All I say is that if the right hon. Gentleman has been able to spend money in an entirely original fashion he ought to be able to frame his Financial Resolutions with more precision than he has done and to tell the Committee what, in fact, the increased amount of money, if any, will be.
The right hon. Gentleman has not done the passage of his Bill any good. He could have been more candid. He could have been less provocative. He could have tried to guide the Committee in what he considers will happen. The local authorities are frightened about that. They are very alarmed about the effect of these provisions on Government finance. We have had resolutions already from local authorities all over the country, including Tory authorities. Indeed, we all know that privately the right hon. Gentleman is exceedingly alarmed about the effect on industrial hereditaments and residential property which will result from the legislation which has been passed and that which is now going through Parliament.
Local authorities are, naturally, anxious to find out whether the rateable value of their residential property will go up or down, because if it goes down they get more money and if it goes up they get less. We fear that in areas where there is an abundance of small cottage property the new principles of valuation will bring the valuation up and reduce the amount of money from the Exchequer whereas those areas where in the main larger houses exist will benefit. Therefore, we are anxious to find out whether the right hon. Gentleman

has made any estimate whatever of what may be the effect on rate equalisation grants of the new principles of valuation which he himself is operating under this Bill and which he is asking authority for in this Money Resolution. At least, we are entitled to have that. Whatever else may have been out of order, those two questions are in order.

12.45 a.m.

Mr. H. Macmillan: It would be most discourteous of me not to answer the points which the right hon. Gentleman has now put. I might say that he has this advantage. If his batteries are not always very heavy, they are exceedingly mobile, so that after arguing for a considerable time about the part of the Resolution which deals with the cost of valuation he can now say, "I do not press that any more; I have nothing more to say about that; I now come to the second part." What has been the whole subject of the discussion up to now— the precise cost or the possible additional cost—the right hon. Gentleman waived aside and went on to another very important point, but one which he himself pressed for the first time—the effect upon the equalisation grants.
On the first point, I repeat that I do not anticipate that, if Parliament should authorise this new method of valuation, the cost of doing it will, in fact, be no greater than the cost at present. It may quite probably be a little less, but, in a Bill of this kind, it is common form to take these powers in case there should be some small additional cost. I do not think the cost will be greater, but we must cover it.
When the right hon. Gentleman speaks of the impropriety of introducing a Money Resolution without an estimate of the cost, if he looks at the one accompanying the 1948 Act, which ran to two columns of HANSARD, he will find no estimate of the cost, nor, indeed, is it common practice. There is another on the Order Paper today, and it is common form to provide in these cases for an increase if there should be an increase. I can only say that there is not likely to be an increase in the cost, but there may be a small one, and, therefore, we have to take the necessary powers, like all previous Governments have done, to provide for it in case it should happen. I think I have now dealt with that point.
I am not going into the question of an Act of indemnity for my so-called illegal operations, which, tempting though it may be, would be out of order. I will refrain from doing so, because the attack on me was thin, and it is hardly necessary for me to reply to it. The second point, however, is important, and, here again, the right hon. Gentleman seemed to be arguing from two different points of view. If the right hon. Gentleman says that, out of propriety for the House of Commons and our procedure, I ought to be able to say what additional cost may fall upon the Equalisation Fund as a result of the 1948 valuation, as amended by this Bill, the only reason for doing that would be if we anticipated that there might be some heavy additional cost upon the Equalisation Fund, when Parliament ought to be informed if there was likely to be a heavy addition, but the whole tenor of the right hon. Gentleman's speech was the fear, not of an addition, but of a reduction, and, if there was to be a reduction, it would not be necessary to take a Money Resolution to deal with an addition.
Then, the right hon. Gentleman says that, if we find that the standard of assessment is raised, there will be a reduction in the amount paid, but, whatever the argument on that may be, this is a Financial Resolution the sole purpose of which is to provide for a possible addition. That is the purpose of the second part of the Resolution, in case more money has to be provided by the House of Commons, and I can only repeat what I said before. As the right hon. Gentleman knows, the equalisation grant is paid to all counties and county boroughs which, in any year, have a rateable value less than the standard rateable value, which is the measure of the financial resources of the authority.
Nobody can say at this stage—it is quite impossible—what will be the effect of the revaluation when it comes into being over the whole field, but it is necessary to take provision under our ordinary procedure that, if there should be an increase, the Financial Resolution agreed to by the House should ensure that the increase which will be due to the local authorities will be forthcoming out of money provided by Parliament.

Resolution to be reported this day.

Orders of the Day — NATIONAL SERVICE MAN (RELEASE)

Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Vosper.]

12.55 a.m.

Mr. Donald Chapman: I am obliged to the Secretary of State for War for staying for this debate. I hope that the Parliamentary Secretary, with whom I have been conducting correspondence in this case, will soon be enabled to resume his duties.
I am raising this case because I believe a man and his family have been unjustly and almost callously treated by a Government Department, and because I believe the case as a whole raises issues of principle concerning compassionate grounds for release from the Armed Forces and release from doing National Service. The facts of the case are not in very great dispute. Driver Steel is a National Service man who joined the Army last September, and his father, a Birmingham resident and a constituent of mine, is almost totally blind. There was some early dispute in the correspondence, but I trust that has been satisfactorily settled.
Mr. Steel needs his son as his right hand, his eyes, his business brain. He is entirely dependent upon him for the conduct of his business. His son's business acumen is remarkably well developed for one 19 years old, and he has been absolutely in charge of the business under his father's supervision. He is needed to write the cheques, make the purchases, to do the selling and all the extra jobs associated with a one-man business.
The business is a waste paper concern which Mr. Steel built up over a period of about four years to a turn-over of from two to three thousand pounds. It is a business which he particularly badly needed to make successful because the father is in considerable financial difficulties through some previous misadventures in business. Indeed, he is now confronted with the removal of his furniture by the sheriff's officers in order to settle debts on earlier business ventures. It is a distressing position for the man personally.
When this business was at its height his son was called up. The father tried to manage for some time with employees, but, naturally, in such a relation as between a blind man and his son it was difficult to find a replacement. He found no one who could guide him in making purchases—and in that business one has to make selections visually—and to do all the extra work involved in a one-man business. The result is that his business is derelict, the premises are derelict and are being continually broken into, the motor lorries are falling to pieces through neglect, and the business is only worth the few pounds its equipment would fetch as chattels. Finally, the father himself is now left to tune pianos and live on National Assistance. Indeed, his total income amounts to about £7 a week, half of which is accounted for by National Assistance.
In my submission, there is a very strong case for releasing this National Service man. It does not only depend on the state of the business; it depends on the fact that we are here dealing with a blind man who in this country is usually given some extra consideration in matters of compassion. I approached the War Office, and in letter after letter I have been refused this man's release. This raises, first of all, the principle of the case itself, and then the wider principle of when release is to be given to such National Service men. My first indictment of the War Office in this case is that I believe that the Minister or his officials in advising him have dealt quite inadequately, callously and indifferently with the needs of a blind man.
Never in all the correspondence I have had with the War Office on the subject— and I have a good deal of it with me in the Chamber tonight—have the particular needs of a blind man been mentioned, and never has it been suggested that matters might be stretched a little to help a man afflicted in that way. Indeed, the War Office have dealt with the matter by saying, first of all, that if release were given in this case, all normal men, so to speak, with no affliction would so organise their businesses as to be dependent on their sons in order to save them doing their National Service.
That is a disgraceful way of dealing with the question of a blind man. I am not interested in what would happen in a

normal case, because I am sure that in a normal case nobody would expect compassionate treatment. I am surprised that there has been no suggestion of what can be done to help a blind man. A most astounding sentence in one of the letters from the War Office states that the father should never have started the business five years ago when he knew that he might become dependent on his son.
As I said in my reply to that letter, what a ludicrous homily to address to a man in this year of 1953. What a ludicrous thing to say that five years ago, when the son was just leaving school and it was expected that National Service would be only a temporary measure, and when a blind man could expect some measure of compassion, he should never have started the business in the first place.
Therefore, my first indictment is that the War Office has been totally inconsiderate over the whole case. My second indictment is that it has shifted its ground. In the early correspondence, it implied that there was no indispensability in the relationship between the father and the son. After I had gone to considerable trouble to find out the real facts and had sent them in further letters to the War Office, the Minister shifted his ground, and in a subsequent letter he admitted the indispensability, and then made the excuse that the man should not have started the business in the first place.
The whole matter has been very badly handled indeed. It has not been handled in the way that a great Government Department should handle a case of compassion involving not only a small business, not only a man in considerable financial difficulties, but also a blind man in whose case we in this country usually try to make an exception whenever we can. In response to pressure from me, the Minister offered to give the man leave, not release, to start the business again, or—which I thought was almost an insult—to wind it up. Taking the best offer, to let him start it again by giving the National Service man leave, I would point out that this man would not be able to keep the business going without his son. According to the Minister's definition of "leave" the young man would have to go back once the business had been started, when the process of decay of the business would begin again.
What does the Minister's offer mean? Why cannot we have release on the understanding to it will only go on so long as the business is restarted and is successful? Secondly, what does "leave" mean? I forwarded to Driver Steel the letter from the Minister, the final sentence of which reads:
If he applies to his commanding officer I will ensure that this application gets sympathetic consideration.
What does it mean? Driver Steel has seen his commanding officer with that letter, and was told that the officer commanding could do nothing about it. All he could do was to give him 10 days' compassionate leave. Had the instruction gone through? If it had, why was it not carried out in the spirit in which I am sure the Minister intended it to be?
Lastly, on what grounds can one reasonably expect to get release for a National Service man when some such consideration as blindness or other dependability of father, mother or very near relative is involved? Of all the cases I have had to handle since I came into Parliament I have not found one more strong than this, and I have not been more shocked by the attitude of the Minister. I do not think he meant it, but some of his letters gave such an impression of indifference and callousness to the state of this man and his need for his son that the right hon. Gentleman cannot really defend it. I hope that this morning—as it now is—the Minister will reverse his decision in this case and will give some guidance how one can in future expect such cases to be dealt with by the War Office.

1.8 a.m.

The Secretary of State for War (Mr. Antony Head): It is the hon. Member's job, I appreciate, as it is the job of all hon. Members, to represent the case of their constituents, especially when they are in difficulty. By the way that the hon. Member made his speech I appreciate that he feels deeply on the subject. He certainly has not been failing in his duty as a most conscientious Member of Parliament representing a difficulty which has arisen within his constituency.
I, also, have my duty, which is to look at these cases not purely as individual

cases but from the point of view of the administrators of a scheme which is almost universally unpopular, in the sense that National Service has never been welcomed in the country because under it young men are taken away from their normal lives for two years of compulsory service. The hon. Gentleman referred both at the start and at the conclusion of his speech to the question of principle. In replying to him I had better deal, first of all, with that point.
Remember that we are dealing with, and that the discussion relates to, exemption of a man from National Service, from his two years' obligation, on compassionate grounds. That opportunity is one which many people seek and for which we get many representations. Therefore, we have to consider very carefully all these representations, remembering certain principles. By and large, although perhaps over-simplifying, these cases fall into two categories. The first is where a parent is a widow, or where neither parent is in work, and would be destitute without the employment and support of the son. The second is where the absence of the young man—an only son, perhaps, or where two sons are called up simultaneously—would cause undue suffering to parents because of special circumstances of ill-health.
Now, how does this work out in practice, when there is destitution or serious suffering through ill-health? In almost all cases, it works out in this way. When the young man reaches 18 years, and is due for call-up, he states his problem. He states it to the Ministry of Labour on registration. Every young man who goes for registration is given particulars of the scheme, and is told that he can apply for deferment, which is given at six-monthly intervals, normally up to a year.
That is the normal way in which action is taken under the two headings to which I have referred. A young man is given the two periods of six months, and in the majority of cases, if it is a question of support, some alternative arrangements may have been made or, if it is a matter of ill-health, there may have been an improvement, or assistance may have been given by the authorities. So, there is a period in which the young man may be able to solve his problem. In the majority of cases, the problem is taken up by the


deferment but, there may be an alteration of circumstances, where a young man is called up, through sudden deterioration in a parent's health or in a parent's circumstances.
In this particular case, there has, I think the hon. Gentleman will agree, been no sudden alteration. The conditions obtaining when this young man was called up have obtained since the start of the subject matter four years ago. I do not think it entirely fair to label the War Office as having a heart of stone, although it is understandable that one should feel great sympathy, for we are concerned here with a blind man; and, ipso facto, that this case should receive immediate sympathy.
I should like to deal with it chronologically. I am just as sympathetic as the hon. Member, but I must point out that Mr. Steel has not suddenly become blind. He first went to a blind school at the age of seven, and his whole life has been based and lived on this affliction. It is not something which has made him suddenly dependent on his son. He has been trained since 1927 as a piano tuner, and that is the main means of his support. He suffers a most tragic affliction, but it is not a sudden, or a new one. Four years ago, he started up in the waste paper business. It is a perfectly proper thing for him to have done, but he started in 1949, and the National Service Act came in during 1948. Of course, he may have thought that National Service would have been temporary.
As the years went by, and as the date for Master Steel's call-up got nearer, the possibility must have loomed larger and larger to Mr. Steele senior. That, I think, is fair. In September, 1951, young Mr. Steel became due to register and he was warned by the Minister of Labour. Now, he did not register, and he was only registered in the following May, in 1952, as a result of a "follow up" by that Department, so he had another period when he knew he ought to have registered and had not. I am only stressing this interval as a period in which some arrangement or attempt could have been made to meet this problem which had been coming to them over the years.
He was registered in May, 1952. When he did so—and this is of importance in

this case—no application whatever was made for deferment. The hon. Gentleman told me in his letter that Mr. Steel junior did not apply for deferment because he thought deferment for another six months was only putting off the evil day. The point is, when in these grave difficulties, why not put off the evil day and have six months in which to try to do something to meet it? Saying it was only putting off the evil day was a tacit assumption that he had got to do his two years' service. When a man says he cannot serve because his father is in such distress, in 90 per cent. of such cases he applies for deferment. I leave it at that; I only state it as being of significance in my opinion.
What happened next chronologically was that Mr. Steel senior wrote to the War Office in February, 1953. When the letter arrived it was quite clear to us in the War Office that what we had to consider was, first, "Can Mr. Steel senior support his wife and family on what he is now doing?" Secondly, "Is he, as a blind man, being caused exceptional suffering because of this affliction by the absence of his son?" Those were the two questions before us, and I should like to take each in turn.
The first thing we find out is what Mr. Steel is earning. Now his pay for the year before our inquiries was averaging £7 8s. 4d. a week. Although I do not claim that is luxurious pay, I think the hon. Gentleman would agree it is adequate pay on which to keep a wife and daughter of nine. That pay is made up by his earnings from what he has been trained to do from 1927 as a piano tuner, supplemented by a grant from the Birmingham Royal Blind Institution acting on behalf of the Birmingham City Council. Whether the hon. Gentleman quarrels with me or not, I do not think one can say that this man is destitute on £7 8s. 4d. a week. So the next thing we have to see about is his affliction for blindness.

Mr. Chapman: What about the business?

Mr. Head: I am coming to the business. I am not trying to shirk it. On the question of his blindness, as I said, it started tragically at the age of six. His son's absence may be difficult for the business, but the sudden deprivation of


his son is not so serious on account of the blindness as might seem at first because it is an affliction he has had for a very long time.
Now I come to the wastepaper business, which was started four years ago by Mr. Steel senior. It is not for me to go into it, but the hon. Gentleman has rather put this case as though the wastepaper business were a matter of life and death to Mr. Steel senior and was the means of his supporting his family and of his financial affairs being satisfactorily arranged. I query that, for this reason. First, as far as I can make out—I am not talking about future expectations, which I cannot judge—the wastepaper business has so far made no profits.

Mr. Chapman: Quite the reverse.

Mr. Head: The hon. Gentleman says "Quite the reverse," but I am assured that that is not so. The hon. Gentleman will appreciate that the grant of £3 13s. a week or more from the blind institution is entirely a grant to make up pay, and if the business had been making a profit that would have been deducted from the grant. But no deduction was made.

Mr. Chapman: Certified accountant's certificate.

Mr. Head: All I can say is that there is something wrong, because this grant is made to make up a total of £7 8s. 4d. I was informed by the Blind Institution that no profit was made by the business. However, I will not argue that point although it is curious that he was drawing an emolument to make up his pay to the limit.
When this business was started the call-up of the young man was coming nearer and nearer. There were three other employees in the business which was one that, if it appeared essential that Mr. Steel junior should be there, could have been wound up. The hon. Gentleman is saying that we should exempt Mr. Steel because, although there are three other employees, Mr. Steel as the driver is essential.

Mr. Chapman: He is not just the driver. His father is absolutely dependent on him for the business side.

Mr. Head: Yes, but I am saying that the father was blind when he started the business. This thing had been coming closer and closer. The hon. Gentleman will appreciate that, if I am to exempt that young man, many other young men in this country could be in a position in which their fathers might be made dependent on them.

Mr. Chapman: Mr. Chapman indicated dissent.

Mr. Head: But that is a fact. If Mr. Steel senior had suddenly gone blind, I would have said, "Here is a case of a man with a sudden affliction who has been thrown on to the support of his son," but this could be seen coming and Mr. Steel senior is drawing £7 8s. 4d. a week, which is sufficient to support his family.
Neither of the two counts—the support of the family and undue suffering from his affliction—were sufficient to enable me to grant exemption for this young man from his two years' National Service without creating a precedent which would mean that many others could claim this concession. I say again that the normal way in which these matters are dealt with is by deferment at the initial stages when the War Office does a lot of sorting out. But no deferment was claimed. It was coming. It was evaded the first time. National Service was accepted the second time and only subsequently was this claim made.
If Mr. Steel had been destitute or had been suffering greatly through his affliction, the War Office would have been far from hardhearted. I say again that if any help can be given in the immediate difficulty by compassionate leave, it shall be granted, but I cannot exempt this young man from his obligation of two years' service which is unwelcome to many people.

Adjourned accordingly at Twenty-three Minutes past One o'Clock, a.m.